The MOU is finalized. What will it mean if your state signs it?

The MOU is finalized, will your state sign it?

When the Food, Drug & Cosmetic Act (FD&C Act) was passed in 1997, the FDA was expected to draft a memorandum of understanding (MOU) of the interstate distribution of compounds. The MOU was supposed to be endorsed by each state and serve as an interagency consensus on how to track and regulate inordinate amounts of compounds shipped across state lines. A system would be put in place that would help FDA identify, inspect, and assess patient safety of these facilities. Finally, more than 23 years after the FD&C Act was passed, the FDA has released its final draft of the MOU.

Take-Home Messages of the MOU:

  1. States that sign the MOU must commit to investigating, documenting, and reporting to FDA of pharmacies that ship over 50 percent of their compounded drugs to out-of-state patients.
  2. Pharmacies residing in states that don’t sign the MOU may not ship more than five percent of prescription compounds across state lines.

Critics say the FDA has underestimated the administrative burden and associated economic costs the MOU will have on states which will affect patient access to compounds. It is postulated that compounding pharmacies located in states that do not sign the MOU and are limited by the five percent cap may consider closing or relocating to a state that has agreed to it. Furthermore, some pharmacy stakeholders ask why the term “distribution” is redefined in the MOU to include the dispensing of patient-specific prescriptions. This is inconsistent with the definition referenced in the FD&C Act and could be the basis for future litigation arguments.

The National Association of Boards of Pharmacy (NABP) believes their Information Sharing Network could be part of the solution to the administrative burden put on states. The Information Sharing Network is an expansion of the NABP e-Profile Connect program. General pharmacy and patient complaint data is entered into the system by the compounding pharmacy and governing state board of pharmacy. The network flags certain data for boards of pharmacy to review, including pharmacies distributing inordinate amounts of compounds interstate and complaints of serious adverse events or quality issues with compounds. Boards can review and submit information to the FDA though the portal, thereby potentially simplifying the reporting and data management process.  

What does this mean for you?

If your state does decide to sign the MOU:

  1. Your practice site will be able to ship up to 50% of prescription compounds across state lines.
  2. You may ship over 50% of prescription compounds to patients residing out-of-state with the understanding that the FDA will be notified of this practice.
  3. Patient complaints and compound quality issues will be tracked and reported to the FDA.

If your pharmacy ships inordinate amounts of compounds out of state and/or produces compounds associated with patient complaints or quality issues you could be next on FDA’s pharmacy inspection list.

If your state does not sign the MOU, your practice site will be able to ship up to 5% of prescription compounds across state lines.

Since the final MOU was released on October 26, 2020, states have 365 days to make their decision before FDA begins to enforce the five percent limit. Stay tuned to see which states decide to sign and which ones do not so you may analyze how your pharmacy will be affected.

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