Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products Between the State Board of Pharmacy or Other Appropriate State Agency and the Food and Drug Administration; Availability
| Published date | 27 October 2020 |
| Citation | 85 FR 68074 |
| Record Number | 2020-23687 |
| Section | Notices |
| Court | Food And Drug Administration |
Federal Register, Volume 85 Issue 208 (Tuesday, October 27, 2020)
[Federal Register Volume 85, Number 208 (Tuesday, October 27, 2020)]
[Notices]
[Pages 68074-68082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23687]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2015-N-0030]
Memorandum of Understanding Addressing Certain Distributions of
Compounded Human Drug Products Between the State Board of Pharmacy or
Other Appropriate State Agency and the Food and Drug Administration;
Availability
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice of availability; withdrawal.
-----------------------------------------------------------------------
SUMMARY: The Food and Drug Administration (FDA or the Agency) is
announcing the availability of a final standard memorandum of
understanding (MOU) entitled ``Memorandum of Understanding Addressing
Certain Distributions of Compounded Human Drug Products Between the
[insert State Board of Pharmacy or Other Appropriate State Agency] and
the U.S. Food and Drug Administration'' (final standard MOU). The final
standard MOU describes the responsibilities of a State Board of
Pharmacy or other appropriate State agency that chooses to sign the MOU
in investigating and responding to complaints related to drug products
compounded in such State and distributed outside such State and in
addressing the interstate distribution of inordinate amounts of
compounded human drug products.
DATES: The announcement of the MOU is published in the Federal Register
on October 27, 2020. FDA is withdrawing its revised draft standard MOU
that published on September 10, 2018 (83 FR 45631), as of October 27,
2020.
ADDRESSES: Submit electronic comments on the final standard MOU to
Docket No. FDA-2015-N-0030. Submit written comments on the final
standard MOU to the Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm.
[[Page 68075]]
1061, Rockville, MD 20852. All comments should be identified with the
docket number found in brackets in the heading of this document. Submit
written requests for single copies of the final standard MOU to the
Division of Drug Information, Center for Drug Evaluation and Research,
Food and Drug Administration, 10001 New Hampshire Ave., Hillandale
Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-
addressed adhesive label to assist that office in processing your
requests. See the SUPPLEMENTARY INFORMATION section for electronic
access to the draft document.
FOR FURTHER INFORMATION CONTACT: Alexandria Fujisaki, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, Rm. 5169, Silver Spring, MD 20993-0002, 240-
402-4078.
SUPPLEMENTARY INFORMATION:
I. Background
Section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act)
(21 U.S.C. 353a) describes the conditions that must be satisfied for
drug products compounded by a licensed pharmacist or licensed physician
to be exempt from the following sections of the FD&C Act: (1) Section
501(a)(2)(B) (21 U.S.C. 351(a)(2)(B)) (concerning current good
manufacturing practice (CGMP) requirements), (2) section 502(f)(1) (21
U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate
directions for use), and (3) section 505 (21 U.S.C. 355) (concerning
the approval of drugs under new drug applications or abbreviated new
drug applications).
One of the conditions to qualify for the exemptions listed in
section 503A of the FD&C Act is that (1) the drug product is compounded
in a State that has entered into an MOU with FDA that addresses the
distribution of inordinate amounts of compounded drug products
interstate and provides for appropriate investigation by a State agency
of complaints relating to drug products distributed outside such State;
or (2) if the drug product is compounded in a State that has not
entered into such an MOU, the licensed pharmacist, pharmacy, or
physician does not distribute, or cause to be distributed, compounded
drug products out of the State in which they are compounded in
quantities that exceed 5 percent of the total prescription orders
dispensed or distributed by such pharmacy or physician (5 percent
limit) (see section 503A(b)(3)(B)(i) and (ii) of the FD&C Act). Another
condition to qualify for the exemptions listed in section 503A of the
FD&C Act is that the drug is compounded for an identified individual
patient based on the receipt of a valid prescription order or a
notation, approved by the prescribing practitioner, on the prescription
order that a compounded product is necessary for the identified patient
(section 503A(a) of the FD&C Act). This MOU does not alter this
condition.
Section 503A(b)(3)(B) 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 the States in complying with section
503A(b)(3)(B)(i).
FDA is withdrawing the revised draft standard MOU entitled
``Memorandum of Understanding Addressing Certain Distributions of
Compounded Drug Products Between the State of [insert State] and the
U.S. Food and Drug Administration,'' which was issued in September 2018
(2018 revised draft standard MOU). The 2018 revised draft standard MOU
is superseded by the final standard MOU.
II. Previous Efforts To Develop a Standard MOU
In the Federal Register of January 21, 1999 (64 FR 3301), FDA
announced the availability for public comment of a draft standard MOU,
developed in consultation with NABP (1999 draft standard MOU). Over
6,000 commenters submitted comments on the 1999 draft standard MOU.
Because of litigation over the constitutionality of the advertising,
promotion, and solicitation provision in section 503A of the FD&C
Act,\1\ the draft standard MOU was not completed. In 2013, section 503A
of the FD&C Act was amended by the Drug Quality and Security Act (DQSA)
(Pub. L. 113-54) to remove the advertising, promotion, and solicitation
provisions that were held unconstitutional, and FDA took steps to
implement section 503A, including to continue to develop the standard
MOU. In the Federal Register of February 19, 2015 (80 FR 8874), FDA
withdrew the 1999 draft standard MOU and issued the 2015 draft standard
MOU for public comment. FDA received more than 3,000 comments on the
2015 draft standard MOU. In the Federal Register of September 10, 2018
(83 FR 45631), FDA withdrew the 2015 draft standard MOU and issued the
2018 revised draft standard MOU for public comment. FDA received 38
comments during the comment period on the 2018 revised draft standard
MOU. By this notice, FDA is withdrawing the 2018 revised draft standard
MOU and issuing a final standard MOU, which the Agency developed in
consultation with NABP for use by the States in complying with section
503A(b)(3)(B).
---------------------------------------------------------------------------
\1\ The conditions of section 503A of the FD&C Act originally
included restrictions on the advertising or promotion of the
compounding of any particular drug, class of drug, or type of drug
and the solicitation of prescriptions for compounded drugs. These
provisions were challenged in court and held unconstitutional by the
U.S. Supreme Court in 2002. See Thompson v. Western States Med.
Ctr., 535 U.S. 357 (2002).
---------------------------------------------------------------------------
III. Final Standard MOU
In consultation with NABP, FDA has developed a final standard MOU.
FDA considered the comments submitted on the 2015 draft standard MOU
and 2018 revised draft standard MOU, as well as comments on the MOU
provisions it received in connection with a draft guidance on section
503A of the FD&C Act entitled ``Pharmacy Compounding of Human Drug
Products Under Section 503A of the Federal Food, Drug, and Cosmetic
Act'' (2013 draft 503A guidance) (see 78 FR 72901, December 4, 2013).
Below, FDA has summarized and discussed key provisions of the final
standard MOU and, where appropriate, summarized changes that the Agency
made in the final standard MOU. Drug products intended for veterinary
use, repackaged drug products, biological products subject to licensure
through a biologics license application under section 351 of the Public
Health Service Act (42 U.S.C. 262), and drug products compounded by
outsourcing facilities under section 503B of the FD&C Act are not the
subject of the final standard MOU.
A. Investigation of Complaints Relating to Compounded Human Drug
Products Distributed Outside the State
The final standard MOU provides that a State Board of Pharmacy or
other appropriate State agency that enters into the MOU agrees to:
Investigate complaints of adverse drug experiences and
product quality issues relating to human drug products compounded at a
pharmacy in the State and distributed outside the State. Investigations
performed by the State Board of Pharmacy or other appropriate State
agency under this MOU will include taking steps to assess whether there
is a public health risk associated with the compounded drug product and
whether such risk is adequately contained. Investigations will be
performed pursuant to the State Board of Pharmacy's or other
appropriate State agency's established investigatory policies and
procedures, including those related to prioritizing complaints,
provided they are not in conflict with the terms of the MOU;
[[Page 68076]]
If the complaint is substantiated, take action that the
State Board of Pharmacy or other appropriate State agency considers to
be appropriate and warranted, in accordance with and as permitted by
State law, to ensure that the relevant pharmacy investigates the root
cause of the problem that is the subject of the complaint and
undertakes sufficient corrective action to address any identified
public health risk relating to the problem, including the risk that
future similar problems may occur;
Maintain records of the complaints it receives regarding
adverse drug experiences or product quality issues relating to human
drug products compounded at a pharmacy, the investigation of each
complaint, and any response to or action taken as a result of a
complaint, beginning when the State Board of Pharmacy or other
appropriate State agency receives notice of the complaint. The State
Board of Pharmacy or other appropriate State agency will maintain these
records for at least 3 years. The 3-year period begins on the date of
final action on a complaint, or the date of a decision that the
complaint requires no action.
Notify FDA by submission to an Information Sharing Network
or by email to [email protected] as soon as possible, but no later
than 5 business days, after receiving a complaint involving a serious
adverse drug experience or serious product quality issue relating to a
human drug product compounded at a pharmacy and distributed outside the
State, and provide FDA with certain information about the complaint,
including the following: name and contact information of the
complainant, if available; name and address of the pharmacy that is the
subject of the complaint; and a description of the complaint, including
a description of any compounded human drug product that is the subject
of the complaint;
Share with FDA, as permitted by State law, the results of
the investigation of a complaint after the State Board of Pharmacy or
other appropriate State agency concludes its investigation of a
complaint assessed to involve a serious adverse drug experience or
serious product quality issue. This information includes the following:
The State Board of Pharmacy's or other appropriate State agency's
assessment of whether the complaint was substantiated, if available;
and a description and the date of any actions the State Board of
Pharmacy or other appropriate State agency has taken to address the
complaint;
Notify the appropriate regulator of physicians within the
State of complaints of which the State Board of Pharmacy or other
appropriate State agency receives that involve an adverse drug
experience or product quality issue relating to human drug products
compounded by a physician and distributed outside the State. The State
Board of Pharmacy or other appropriate State agency will also notify
FDA by submission to an Information Sharing Network or by email to
[email protected] as soon as possible, but no later than 5 business
days, after receiving the complaint of the following information, if
available: Name and contact information of the complainant; name and
address of the physician that is the subject of the complaint; and
description of the complaint, including a description of any compounded
human drug product that is the subject of the complaint.
The types of complaints of compounded drug products that should be
investigated include any adverse drug experience and product quality
issues. Even non-serious adverse drug experiences and product quality
issues can be indicative of problems at a compounding facility that
could result in product quality defects leading to serious adverse drug
experiences if not corrected. For example, inflammation around the site
of an injection can indicate drug product contamination from inadequate
sterile practices at the compounding pharmacy. If the pharmacy or
physician has inadequate sterile practices, other more serious
contamination could result in serious adverse drug experiences.
The final standard MOU does not include specific directions to the
State Boards of Pharmacy or other appropriate State agencies relating
to how to conduct their investigation of complaints. Rather, as
recommended by comments submitted to FDA previously, the details of
such investigations are left to the State Board of Pharmacy's or other
appropriate State agency's discretion. For example, a State Board of
Pharmacy or other appropriate State agency may review an incoming
complaint describing an adverse drug experience and determine that such
a 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.
The State Board of Pharmacy or other appropriate State agency
signing the final standard MOU would agree to notify FDA about certain
complaints and provide FDA with certain information about the
complaints so FDA could investigate the complaints itself, or take
other appropriate action. The 2018 revised draft standard MOU provided
that notification would occur as soon as possible, but no later than 3
business days of receipt of the complaint. The final standard MOU
provides that notification will occur as soon as possible, but no later
than 5 business days after the State Board of Pharmacy or other
appropriate State agency receives the complaint. This period will
continue to facilitate early Federal/State collaboration on serious
adverse drug experiences and serious product quality issues that have
the potential to affect patients in multiple States, while providing
for notification in a timeframe that is more feasible for the State
Boards of Pharmacy or other appropriate State agencies. FDA increased
the time for notifying FDA in the final standard MOU in response to
comments expressing concern about having sufficient time to process
complaints and notify FDA. We note that FDA has staff on call 24 hours
a day to receive information in emergency situations.
Comments on the 2015 draft MOU expressed concern with certain
provisions regarding States entering into the MOU and agreeing to take
action not permitted by State law or implying that, after taking
action, the State made a legal determination that a complaint had been
resolved. The revised draft standard MOU clarified that the State
should investigate and take action that the State considers to be
appropriate with respect to the complaint in accordance with and as
permitted by State law. FDA also clarified that, by signing the MOU,
the State agrees to take steps to assess whether there is a public
health risk associated with the compounded drug product and whether
such risk is adequately contained rather than make definitive
determinations of risk or confirm containment. The final standard MOU
retains these revisions that addressed the concerns from comments on
the 2015 draft.
B. Distribution of Inordinate Amounts of Compounded Human Drug Products
Interstate
For purposes of the final standard MOU, a pharmacy has distributed
an inordinate amount of compounded human drug products interstate if
the number of prescription orders for compounded human drug products
that the pharmacy distributed interstate during any calendar year is
greater than 50 percent of the sum of the number of prescription orders
for compounded human drug products that the pharmacy sent out of (or
caused to be sent out of)
[[Page 68077]]
the facility in which the drug products were compounded during that
same calendar year and the number of prescription orders for compounded
human drug products that were dispensed (e.g., picked up by a patient)
at the facility in which they are compounded during that same calendar
year (Fig. 1). This concept is called the 50 percent threshold.
[GRAPHIC] [TIFF OMITTED] TN27OC20.000
The final standard MOU provides that State Boards of Pharmacy or
other appropriate State agencies that enter into the MOU will agree to:
On an annual basis, identify, using surveys, reviews of
records during inspections, data submitted to an Information Sharing
Network, or other mechanisms available to the State Board of Pharmacy
or other appropriate State agency, pharmacies that distribute
inordinate amounts of compounded human drug products interstate.
For pharmacies that have been identified as distributing
inordinate amounts of compounded human drug products interstate during
any calendar year, the State Board of Pharmacy or other appropriate
State agency will identify, using data submitted to the Information
Sharing Network or other available mechanisms, during that same
calendar year:
[cir] The total number of prescription orders for sterile
compounded human drug products distributed interstate;
[cir] The names of States in which the pharmacy is licensed;
[cir] The names of States into which the pharmacy distributed
compounded human drug products; and,
[cir] Whether the State inspected for and found during its most
recent inspection that the pharmacy distributed compounded human drug
products without valid prescription orders for individually identified
patients.
Within 30 business days of identifying a pharmacy that has
distributed inordinate amounts of compounded human drug products
interstate, the State Board of Pharmacy or other appropriate State
agency will notify FDA, by submission to an Information Sharing Network
or by email to [email protected], and will include the following
information:
[cir] Name and address of the pharmacy that distributed inordinate
amounts of compounded human drug products interstate;
[cir] The number of prescription orders for compounded human drug
products that the pharmacy sent out of (or caused to be sent out of)
the facility in which the drug products were compounded during that
same calendar year;
[cir] The number of prescription orders for compounded human drug
products that were dispensed (e.g., picked up by a patient) at the
facility in which they are compounded during that same calendar year;
[cir] Total number of prescription orders for compounded human drug
products distributed interstate during that same calendar year;
[cir] Total number of prescription orders for sterile compounded
human drug products distributed interstate during that same calendar
year;
[cir] The names of States in which the pharmacy is licensed as well
as the names of States into which the pharmacy distributed compounded
human drug products during that same calendar year; and
[cir] Whether the State Board of Pharmacy or other appropriate
State agency inspected for and found during its most recent inspection
that the pharmacy distributed compounded human drug products without
valid prescriptions for individually identified patients during that
same calendar year.
If the State Board of Pharmacy or other appropriate State
agency becomes aware of a physician who is distributing any amount of
compounded human drug products interstate, it will notify the
appropriate regulator of physicians within the State. The State Board
of Pharmacy or other appropriate State agency will, within 30 days of
identifying a physician who is distributing any amount of compounded
human drug products interstate, also notify FDA by submission to an
Information Sharing Network or by email to [email protected].
Section 503A of the FD&C Act reflects Congress' recognition that
compounding may be appropriate when it is based on receiving a valid
prescription order or notation approved by the prescribing practitioner
for an identified individual patient. However, drug products compounded
under section 503A are not required to demonstrate that they are safe
or effective, have labeling that bears adequate directions for use, or
[[Page 68078]]
conform to CGMP. Congress, therefore, imposed strict limitations on the
distribution of drug products compounded under section 503A to protect
the public health and the integrity of the drug approval process.
In particular, Congress did not intend for compounders operating
under these statutory provisions to grow into conventional
manufacturing operations making unapproved drugs, operating a
substantial proportion of their business interstate, without adequate
oversight. Although other provisions of the FD&C Act (e.g., the
adulteration provisions regarding drugs prepared, packed, or held under
insanitary conditions) apply to drugs compounded by State-licensed
pharmacies and physicians that may qualify for the exemptions under
section 503A of the FD&C Act, and although FDA may take action in
appropriate cases against compounders whose drugs violate these
provisions or that operate outside of the conditions in section 503A,
Congress recognized that these compounders are primarily overseen by
the States. However, if a substantial proportion of a compounder's drug
products are distributed outside a State's borders, adequate regulation
of those drug products poses significant challenges to State
regulators. States face logistical, regulatory, and financial
challenges inspecting compounders located outside of their
jurisdiction. In addition, if a compounder distributes drug products to
multiple States, it can be very difficult to gather the scattered
information about possible adverse drug experiences or product quality
issues associated with those drug products, connect them to the
compounder, and undertake coordinated action to address a potentially
serious public health problem.
Therefore, as a baseline measure, section 503A(b)(3)(B)(ii) of the
FD&C Act limits the distribution of compounded drug products outside of
the State in which they are compounded to 5 percent of the total
prescription orders dispensed or distributed by a licensed pharmacist,
pharmacy, or physician. It then directs FDA, in consultation with NABP,
to develop a standard MOU that addresses the distribution of inordinate
amounts of compounded drug products interstate and provides for
appropriate investigation by a State agency of complaints relating to
drug products compounded in and distributed outside such State.
Development of the standard MOU involves FDA describing what inordinate
amounts means and providing a mechanism for addressing distribution of
inordinate amounts of compounded human drug products interstate, as
long as the State agrees to appropriately investigate complaints
relating to drug products compounded in and distributed out of the
State. The 5 percent limitation in section 503A(b)(3)(B)(ii) does not
apply to drug products compounded in a State that has entered into the
standard MOU under section 503A(b)(3)(B)(i).
In the 2015 draft standard MOU, FDA proposed that distribution
interstate up to a 30 percent limit would not be inordinate, and that
States entering into the MOU would agree to take action regarding
pharmacists, pharmacies, or physicians that distribute inordinate
amounts of compounded drug products interstate. FDA received a number
of comments indicating that certain pharmacies, such as pharmacies
located near State borders and home infusion pharmacies, distribute
more than 30 percent of their compounded human drug products to
patients interstate because, for example, the patients are located in
another nearby State, or because few pharmacies compound a particular
drug product to treat an uncommon condition for patients dispersed
throughout the country. The comments noted that the proposed definition
of inordinate amounts and the proposed provision in which States agree
to take action could prevent such pharmacies from fulfilling patients'
medical needs for the drug products that they supply. Other comments
expressed concern about instances in which pharmacies are located near
a State border and distribute compounded drug products to the other
side of that border. FDA also received general comments questioning the
Agency's basis for the 30 percent limit and indicating that it was too
low. Some comments suggested that FDA increase the limit, including a
suggestion to increase it to 50 percent.
The 2018 revised draft standard MOU addressed these comments in two
respects. First, it removed the provision in the 2015 draft standard
MOU that States agree to take action with respect to the distribution
of inordinate amounts of compounded human drug products interstate.
Second, it changed what is considered ``inordinate amounts'' from a 30
percent limit to a 50 percent threshold. In the final standard MOU, the
States are not agreeing to take action with respect to distribution of
inordinate amounts of compounded human drug products interstate, but,
instead, to notify FDA of pharmacies that have distributed an
inordinate amount of compounded human drug products interstate. The
Agency does not intend to take action against a pharmacy located in a
State that has entered into the MOU solely because the pharmacy has
exceeded the threshold for inordinate amounts. Rather, the State Board
of Pharmacy or other appropriate State agency entering into the final
standard MOU agrees to collect further information on pharmacies that
have distributed inordinate amounts interstate and provide this
information to FDA to help inform Agency inspectional priorities. The
State Board of Pharmacy or other appropriate State agency also agrees
to notify FDA and the appropriate state regulator of physicians if it
becomes aware of physicians distributing any amount of compounded human
drug products interstate.
We note that States generally have day-to-day oversight
responsibilities over State-licensed pharmacies, pharmacists, and
physicians. In general, FDA considers a State-licensed pharmacy or
physician to be primarily overseen by the State, which is responsible
both for regulation of the compounder and protection of its citizens
who receive the compounded drug products. However, as discussed above,
if a substantial proportion of a compounder's drug products is
distributed outside a State's borders, adequate regulation of those
drugs poses significant challenges to State regulators. In such cases,
although State oversight continues to be critical, additional oversight
by FDA may afford an important public health benefit.
As stated above, the final standard MOU uses 50 percent as the
threshold beyond which the amount of compounded human drug products
distributed interstate by a pharmacy would be considered inordinate.
The 50 percent threshold is the threshold that, with regard to
pharmacies, triggers an information identification and reporting
obligation once it is reached. The Agency believes that more than 50
percent is an appropriate measure of ``inordinate amounts'' because it
marks the point at which pharmacies are distributing the majority of
their compounded human drug products interstate, and the regulatory
challenges associated with interstate distributors discussed above
become more pronounced. At this point, the risk posed by the
distribution practices of the compounder may weigh in favor of
additional Federal oversight in addition to State oversight.
FDA recognizes that, in some cases, pharmacies may distribute more
than 50 percent of a small quantity of compounded human drug products
to contiguous States. Although such pharmacies have exceeded the
inordinate amounts threshold in the final standard MOU, FDA would
[[Page 68079]]
consider other information, such as the number of patients that will
receive the compounded human drug products, if available, when
assessing the pharmacy's priority for risk-based inspection.
Accordingly, when a State Board of Pharmacy or other appropriate State
agency identifies a pharmacy that distributes an inordinate amount of
compounded human drug products interstate, the final standard MOU
provides that the State entity will supply the Agency with certain
information as described above. In addition, if the State Board of
Pharmacy or other appropriate State agency becomes aware of a physician
who is distributing any amount of compounded human drug products
interstate, the State entity will notify both the appropriate regulator
of physicians within the State and FDA. FDA intends to use this
information to prioritize its oversight of compounders based on risk,
focusing on those that appear likely to distribute large volumes of
compounded human drug products, particularly when the distribution is
to multiple States, the drug products are intended to be sterile, and
there is information about a lack of valid prescriptions for
individually identified patients.
The calculation of inordinate amounts in the final standard MOU,
with clarifying changes to the language, is the same as the calculation
proposed in the 2018 revised draft standard MOU, with the exception of
a change in the timeframe used in the calculation from 1 month to 1
year and removing drugs compounded by physicians from the calculation
made by the State Board of Pharmacy or other appropriate State agency.
The 2015 draft standard MOU provided that a compounder is considered to
have distributed an inordinate amount of compounded drug products
interstate if the number of units of compounded drug products
distributed interstate during any calendar month is equal to or greater
than 30 percent of the number of units of compounded and non-compounded
drug products distributed or dispensed both intrastate and interstate
by such compounder during that calendar month. FDA received comments
noting that because the calculation includes both compounded and non-
compounded drug products, in many cases, a substantial factor in
whether a compounder has distributed an inordinate amount of compounded
drug products interstate is whether the compounder offers non-
compounded drug products. For example, under that policy, many
specialty compounding pharmacies that engage in distribution of
compounded human drug products interstate and only distribute
compounded drug products would be able to distribute fewer compounded
drug products interstate before reaching an inordinate amount than a
pharmacy that also fills prescriptions for non-compounded drug
products, even if both pharmacies produced the same amount of
compounded drug products. After considering the public comments, FDA
does not believe that including non-compounded drug products within the
calculation of inordinate amounts would help address the public health
concerns associated with sending compounded human drug products
interstate that Congress sought to address in section 503A(b)(3)(B) of
the FD&C Act. Non-compounded drug products were excluded from the
calculation of inordinate amounts in the 2018 revised draft MOU. This
final standard MOU maintains this exclusion.\2\ FDA removed drug
products compounded by physicians from the inordinate amount
calculation to clarify that the State Board of Pharmacy or other
appropriate State agency signing the MOU does not agree to gather
information about the distribution of compounded drug products
interstate by physicians or to calculate inordinate amounts of drug
products compounded by a physician and distributed interstate. Instead,
the State Board of Pharmacy or other appropriate State agency signing
the MOU agrees that if it becomes aware that a physician is
distributing any amount of compounded human drug products interstate it
will notify the State authority that regulates physicians and FDA. This
focus on States calculating inordinate amounts of pharmacy compounding
reflects FDA's understanding and feedback from State regulators that
the distribution interstate of compounded drug products mainly involves
pharmacy compounders.
---------------------------------------------------------------------------
\2\ FDA also intends to exclude non-compounded drugs from the
calculation of the 5 percent limit in section 503A(b)(3)(B)(ii).
---------------------------------------------------------------------------
FDA received comments on the 2018 revised draft MOU expressing
concern about calculating inordinate amounts by calendar month. After
considering these comments and recognizing the possibility for
significant monthly fluctuations, we have provided for annual
calculation of inordinate amounts in the final standard MOU.
This 50 percent threshold does not function as a limit on the
distribution of compounded human drug products interstate, but,
instead, is a threshold for triggering information gathering about
pharmacy distribution of compounded drugs by the State Board of
Pharmacy or other appropriate State agency and provision to FDA. The
information gathered will be considered by the Agency for the purpose
of helping to inform its risk-based inspection priorities.
C. Definitions
Appendix A retains the definitions of ``adverse drug experience,''
``serious adverse drug experience,'' ``product quality issue,'' and
``serious product quality issue'' from the 2018 revised draft standard
MOU.
To clarify the meaning of ``distribution of inordinate amounts of
compounded drug products interstate,'' the proposed definition of
``distribution'' in the 2018 revised draft standard MOU has been
omitted and ``distribution of compounded human drug products
interstate'' and ``inordinate amounts'' are defined. ``Distribution of
compounded human drug products interstate'' means that a pharmacy or
physician has sent (or caused to be sent) a compounded drug product out
of the state in which the drug was compounded. A pharmacy has
distributed an ``inordinate amount'' of compounded human drug products
interstate if the number of prescription orders for compounded human
drug products that the pharmacy distributed interstate during any
calendar year is greater than 50 percent of the sum of: (1) The number
of prescription orders for compounded human drug products that the
pharmacy sent out of (or caused to be sent out of) the facility in
which the drug products were compounded during that same calendar year;
plus (2) the number of prescription orders for compounded human drug
products that were dispensed (e.g., picked up by a patient) at the
facility in which they were compounded during that same calendar year.
We received a number of comments on the 2015 draft standard MOU and
the 2018 revised draft standard MOU stating that distributing and
dispensing are mutually exclusive activities, such that if a drug
product is distributed, it is not also dispensed, and vice versa. Some
comments asserted, in particular, that a compounded drug product should
not be considered to be ``distributed'' when it is provided pursuant to
a prescription. Other stakeholders, however, agreed with the inclusion
of drug products provided pursuant to a prescription within the
definition of ``distribution'' and maintained that this interpretation
was important to protect the public health.
After considering these comments and the public health objectives
of section 503A(b)(3)(B) of the FD&C Act, FDA
[[Page 68080]]
considers that when a drug is picked up at the facility in which it was
compounded, dispensing, but not distribution, occurs for purposes of
503A(b)(3)(B).
FDA believes that in-person dispensing, where the transaction
between the compounder and the patient is completed at the facility in
which the drug product was compounded, is appropriately overseen,
primarily, by the State outside the context of the MOU, regardless of
whether the compounded drug product subsequently leaves the State. Such
an intrastate, local transaction generally indicates a close connection
among the patient, compounder, and prescriber. By contrast,
transactions by mail often have a less direct nexus among the patient,
compounder, and prescriber than in-person pick-ups and would be
considered ``distribution.''
Drugs dispensed in-person that are later taken out of State will
not contribute to reaching the threshold for inordinate amounts under
the final MOU. Nor will complaints associated with compounded drug
products dispensed this way and subsequently taken out of State be
subject to the complaint investigation provisions of the final MOU. FDA
expects that, in practice, the State in which the initial transaction
occurred would handle such complaints. The State may, in its
discretion, notify FDA of the complaint.
FDA is not persuaded by comments urging the Agency to interpret
``distribution'' and ``dispensing'' to be entirely separate activities
for purposes of section 503A(b)(3)(B) of the FD&C Act. These comments
recommend using definitions for these terms used elsewhere in the FD&C
Act and FDA regulations, and generally conclude that distribution does
not include the transfer of a drug pursuant to a prescription.
The conditions in section 503A, including section 503A(b)(3)(B),
must be interpreted consistent with the prescription requirement in
section 503A(a) of the FD&C Act. If we were to interpret the word
``distribution'' to apply only if a drug is provided without a
prescription, it would mean that drug products compounded under section
503A of the FD&C Act are excluded from regulation under the MOU and the
5 percent limit, because to qualify for the exemptions under section
503A, a compounder must obtain a valid prescription order for an
individually identified patient. For the reasons stated previously in
this document, we believe this would achieve the opposite of what
Congress intended. A compounded drug product may be eligible for the
exemptions under section 503A of the FD&C Act only if it is, among
other things, ``compounded for an identified individual patient based
on the receipt of a valid prescription order or a notation, approved by
the prescribing practitioner, on the prescription order that a
compounded product is necessary for the identified patient.''
Nor is there anything to suggest that Congress understood
``distributed'' and ``dispensed'' to be mutually exclusive categories
rather than overlapping categories for purposes of section 503A.
Section 503A(b)(3)(B) of the FD&C Act does not define ``distribution''
to exclude dispensing, which Congress has done elsewhere when that was
its intention.\3\ The definition proposed by comments would write an
exclusion for dispensing, in its entirety, into the statute where
Congress did not. Indeed, with respect to comments suggesting that
drugs dispensed pursuant to prescriptions could not also be
``distributed,'' we note that, in section 503A(b)(3)(B), Congress
specifically contemplated that prescription orders could be
``distributed'' when it directed the Agency to count the number of
prescription orders that pharmacists and prescribers distributed.
---------------------------------------------------------------------------
\3\ In other (non-compounding) contexts, where it would further
a regulatory purpose, Congress and the Agency have specifically
defined ``distribute'' to exclude dispensing. See, for example,
section 581(5) of the FD&C Act (21 U.S.C. 360eee(5)), which applies
to Title II of the DQSA, and 21 CFR 208.3, which applies to 21 CFR
part 208. Section 503A of the FD&C Act does not contain a similar
definition, or a similar specific direction to exclude dispensing
from the meaning of distribution. We also note that these
definitions were adopted for provisions that focus on conventionally
manufactured drug products, which assign different obligations to
dispensers than to wholesalers, packagers, or other intermediaries
in light of the different role that dispensers play with respect to
product labeling and the drug distribution chain. In contrast,
section 503A of the FD&C Act focuses on compounded drugs, and the
reasons for defining ``distribution'' to exclude dispensing in Title
II of the DQSA or part 208 do not apply.
---------------------------------------------------------------------------
IV. Other Issues
A. Authority of State Boards of Pharmacy or Other Appropriate State
Agencies
The 2018 revised draft standard MOU proposed that ``States'' would
be the signatories of the MOU. In the final standard MOU, FDA clarifies
the State party to the agreement, which is described as the ``State
Board of Pharmacy or other appropriate State agency.'' FDA received
comments expressing concerns that the State entity signing the MOU
(e.g., the State Board of Pharmacy) may not have regulatory authority
over physician compounding and could not agree to the MOU provisions
regarding physicians as they appeared in the 2018 revised draft
standard MOU. With regard to physician compounding, FDA has revised
certain provisions from the 2018 revised draft standard MOU. Under the
final standard MOU, a State Board of Pharmacy or other appropriate
State agency would enter into the MOU on behalf of the State and agree
to (1) notify FDA and the appropriate regulator of physicians within
the State when it receives a complaint about adverse drug experiences
or product quality issues associated with a human drug product
compounded by a physician and distributed outside the State; and (2) if
it becomes aware of a physician distributing any amount of compounded
human drug products interstate, notify FDA and the appropriate
regulator of physicians within the State.
B. Physician Compounding
It is FDA's understanding that physicians who compound drugs
generally do so for their own patients, within their own professional
practice, and provide them intrastate. FDA believes that, generally,
physicians are not engaged in compounding that results in routine
distribution of compounded drug products interstate.
Additionally, several comments advised that State Boards of
Pharmacy do not oversee physician compounding and would not be able to
agree to the provisions under the 2018 revised draft standard MOU with
respect to oversight of physician compounding (collecting additional
information to identify whether a physician compounder is distributing
inordinate amounts of compounded drug products interstate, etc.).
Accordingly, under the final standard MOU, State Boards of Pharmacy or
other appropriate State agencies would agree to (1) notify FDA and the
appropriate regulator of physicians within the State when they receive
complaints about adverse drug experiences or product quality issues
associated with a human drug product compounded by a physician and
distributed outside the State; and (2) if they become aware of a
physician distributing any amount of compounded human drug products
interstate, notify FDA and the appropriate regulator of physicians
within the State. The information provided to FDA will help inform
Agency inspectional priorities with respect to physicians who compound
human drug products and provide information to State regulators of
physicians for appropriate action.
[[Page 68081]]
C. Development of a Standard MOU
A number of comments on the 1999 draft standard MOU, the 2013 draft
503A guidance, the 2015 draft standard MOU, and the 2018 revised draft
MOU suggested that FDA negotiate MOUs with individual States, rather
than develop a standard MOU. Section 503A of the FD&C Act requires the
Agency to develop a standard MOU for use by the States. Furthermore, it
would be impractical to develop an individualized MOU with every State,
and creating individualized MOUs would create a patchwork of regulation
of distribution of compounded human drug products interstate by
compounders seeking for their drug products to qualify for the
exemptions under section 503A of the FD&C Act. This would be confusing
to the healthcare community, as well as regulators.
D. Exemptions From the Provisions Related to Distribution of Inordinate
Amounts of Compounded Human Drug Products Interstate
Some comments on the 2013 draft 503A guidance, the 2015 draft
standard MOU, and the 2018 revised draft standard MOU requested that we
consider exempting certain drug products or types of compounding
entities from the threshold in the MOU and the 5 percent limit. For
example, some comments recommended that we exempt nonsterile products.
American consumers rely on the FDA drug approval process to ensure
that medications have been evaluated for safety and effectiveness
before they are marketed in the United States. Drugs made by
compounders, including those made at outsourcing facilities, are not
FDA-approved. This means that they have not undergone premarket review
of safety, effectiveness, or manufacturing quality. Therefore, when an
FDA-approved drug is commercially available, FDA recommends that
practitioners prescribe the FDA-approved drug rather than a compounded
drug product unless the prescribing practitioner has determined that a
compounded product is necessary for the particular patient and would
provide a significant difference for the patient as compared to the
FDA-approved commercially available drug product.
In section 503A of the FD&C Act, Congress enacted several
conditions to differentiate compounders from conventional manufacturers
and provided that only if the compounders meet those conditions can
they qualify for the exemptions from the drug approval requirements in
section 505 of the FD&C Act. One of those conditions relates to
limitations and other measures to address distribution of compounded
drug products interstate, and FDA intends to enforce those provisions
to differentiate compounding that qualifies for the exemptions from
conventional manufacturing in the guise of compounding that does not
and will apply the conditions to all types of drugs and all categories
of compounding.
E. Information Sharing Between the State Boards of Pharmacy or Other
Appropriate State Agencies and FDA
The final standard MOU provides that State Boards of Pharmacy or
other appropriate State agencies will agree to notify FDA of a
complaint relating to a compounded human drug product distributed
outside the State involving a serious adverse drug experience or
serious product quality issue and provide information about those
experiences and issues. The final standard MOU also provides that State
Boards of Pharmacy or other appropriate State agencies will notify FDA
if they identify a pharmacy that has distributed inordinate amounts of
compounded human drug products interstate. In addition, State Boards of
Pharmacy or other appropriate State agencies will notify FDA and the
appropriate regulator of physicians within the State if the State
entity becomes aware of a physician who is distributing any amount of
compounded human drug products interstate, or if the State entity
receives a complaint involving an adverse experience or product quality
issue relating to a human drug product compounded by a physician and
distributed outside the State.
FDA has entered into a cooperative agreement with NABP to establish
an information sharing network that is intended to, in part, facilitate
State information reporting to FDA by State Boards of Pharmacy or other
appropriate State agencies that enter into the MOU with FDA addressing
distribution of compounded drugs interstate.\4\ The goal of this
information-sharing and research initiative is to improve the
management and sharing of information available to State regulators and
FDA regarding State-licensed compounders and the distribution of
compounded human drug products interstate to support better and more
targeted regulation and oversight of compounding activities to help
reduce risk to patients. This information will be important to help
States to focus their limited resources on compounders for which they
have primary oversight responsibility that present the greatest risk.
It will also facilitate FDA's ability to determine when additional
Federal oversight is warranted, such as when a large-scale compounder
distributes drug products to multiple States, potentially causing
significant and widespread harm if its products are substandard. FDA
expects that the information sharing network will be designated by FDA
for purposes of the MOU to collect, assess, and allow review and
sharing of information pursuant to the MOU. FDA regularly posts, on its
compounding website, information about enforcement and other actions
related to compounders that violate the FD&C Act, and it is obligated
to share certain information with States under section 105 of the DQSA.
In addition to these measures, FDA is taking steps to proactively share
information with States about complaints that it receives regarding
compounded drug products, consistent with Federal laws governing
information disclosure.
---------------------------------------------------------------------------
\4\ See RFA-FD-19-025, available at https://grants.nih.gov/grants/guide/rfa-files/RFA-FD-19-025.html.
---------------------------------------------------------------------------
F. Enforcement of the 5 Percent Limit on Distribution of Compounded
Human Drug Products Out of the State in Which They Are Compounded
In the 2013 draft 503A guidance, FDA stated that it does not intend
to enforce the 5 percent limit on distribution of compounded human drug
products outside of the State in which they are compounded until 90
days after FDA has finalized a standard MOU and made it available to
the States for their consideration and signature. Most comments on the
2013 draft 503A guidance that raised this issue said this period was
too short but did not recommend a specific alternative. A few comments
recommended a different timeframe, one recommending 120 days and
another recommending 365 days. The 1997 Senate Committee Report for the
Food and Drug Administration Modernization Act suggests that a 180-day
period for States to decide whether to sign might be appropriate.\5\ In
the notice of availability for the 2018 revised draft standard MOU,
consistent with the 2015 draft standard MOU, the Agency proposed a 180-
day period after
[[Page 68082]]
the final standard MOU is made available for signature before FDA will
enforce the 5 percent limit in States that have not signed the MOU, and
invited public comment on whether this was an appropriate timeframe.
Some commenters on the 2018 revised draft standard MOU stated that more
time may be necessary because some States may be required to enact new
laws and promulgate new regulations before entering the MOU. Therefore,
in response to these comments, FDA is providing a 365-day period for
States to decide whether to sign the MOU before FDA intends to begin
enforcing the 5 percent limit in States that do not sign. It is FDA's
understanding that this extended timeframe corresponds to a full
legislative cycle for most States and should, therefore, afford
sufficient time for States to modify their laws and regulations, if
necessary.
---------------------------------------------------------------------------
\5\ ``[U]ntil the State . . . enters into a memorandum of
understanding (MOU) with the Secretary or 180 days after the
development of the standard MOU, whichever comes first, the [section
503A] exemption shall not apply if inordinate quantities of
compounded products are distributed outside of the State in which
the compounding pharmacy or physician is located.'' (U.S. Senate
Committee Report)
---------------------------------------------------------------------------
V. Paperwork Reduction Act of 1995
This MOU refers to previously approved collections of information.
These collections of information are subject to review by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3521). The collections of information have been
approved under OMB control number 0910-0800.
VI. Electronic Access
Persons with access to the internet may obtain the final standard
MOU at either https://www.fda.gov/drugs/human-drug-compounding/regulatory-policy-information, https://www.fda.gov/drugs/guidance-compliance-regulatory-information/guidances-drugs, or https://www.regulations.gov.
Dated: October 21, 2020.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2020-23687 Filed 10-26-20; 8:45 am]
BILLING CODE 4164-01-P
