By PCCA Public Affairs

For years, the Food and Drug Administration (FDA) has shared its version of what a memorandum of understanding (MOU) between it and the various states would look like. Its concept held language disagreeable to compounding pharmacists. The FDA’s MOU position would have held states to an unfunded inspection-and-reporting mandate and confused language in existing law relating to the definitions of “distribution” and “dispensing” of compounded prescriptions. A lot of time and effort went into encouraging the FDA to change course before committing its flawed concepts into field-enforcement language and action.

In October, the FDA finalized its MOU in a format that remains disagreeable to compounders. According to the new guidance, if a state decides not to sign an MOU with the FDA, pharmacies in that state can send no more than 5% of their human compounded medications to patients in other states. This is the direct result of the FDA’s confused use of the terms “dispense” and “distribute” in the law. Nevertheless, as things stand, this regrettably will be the new position of the FDA and its enforcement posture after October 2021.

Perhaps this issue does not immediately impact you. We believe it does impact all sizes of pharmacies compounding human medications near a border with a neighboring state, pharmacies that specialize in particular treatment options and serving patients regionally or nationally, pharmacies serving snowbirds, pharmacies serving specific regions of the country, and even those who don’t have out-of-state patients today but aspire for the freedom to grow their practice tomorrow.

In states that do sign an MOU, no limitation is placed on the number or percentage of patients that can be served residing out of state. A reporting requirement to the FDA kicks in once more than 50% of human compounds are sent to patients out of state. Congress included this provision in the Drug Quality and Security Act, which became law in 2013.

Because this situation is soon to be a reality in the industry, PCCA is recommending that pharmacies encourage their state boards of pharmacy to sign the MOU . If your state board will enter into an MOU, you should learn the administrative process going forward, including how long that will take. If your state board will not enter into an MOU, we encourage you to gather information about why they won’t. It’s an incredible patient access issue and existential business issue for many. Overcoming the lack of funding and other reasons states legitimately have for not signing it could be vital to the current or future state of your pharmacy.

Our belief is that the best course of action is to help your state board of pharmacy understand the threat, or potential future threat, to your patients’ prescription access and your business should the current version of the unsigned MOU remain in force — and request they find a way to sign it. By signing the MOU, you and your state will have new obligations, but your pharmacy will be allowed to serve patients regardless of their address.

PCCA is aware of one lawsuit seeking to force the FDA to address the grievances of some compounding pharmacists, and there may be other lawsuits by the time you read this. No one can be certain of an outcome in the courts. But we can file a court brief in support of compounders, and we can hope!

To recap, by October 2021, states must decide whether to sign the MOU with the FDA. At that point, the FDA is expected to enforce the 5% cap on out-of-state distributions for pharmacies in states that do not sign. In the coming months, we will learn more about the form that the FDA’s enforcement structure will take. It is anticipated that pharmacies shipping more than 5% will lose their exemptions under Section 503A of the Food, Drug and Cosmetic Act in states that do not sign the MOU. Again, we think pharmacies are best served by getting their states to sign the MOU while the industry and individual pharmacies pursue all paths to correct or improve the flawed interpretations of the FDA.

You can learn more about this in our article “ What Does the FDA Final Standard MOU Do? ” here on The PCCA Blog. The guidance is unchanged from the version sent to the White House Office of Management and Budget in May 2020. You can also visit the FDA’s website to find the final MOU.

Action Needed

If your pharmacy is sending compounded medications to human patients in other states, reach out to contacts at your state board of pharmacy and ask that they sign the MOU. Explain how a 5% limitation would impact your practice and your patients. Some states are actively discussing and considering the MOU, while others are at the very early stages. Either way, it will ultimately be considered, and they will be more informed having heard from you. If PCCA members still have questions or want to share feedback from their state boards, they can email us at publicaffairs@pccarx.com.

A version of this article originally appeared in PCCA’s members-only magazine, the Apothagram.