FDA finally releases “final” MOU, and it’s flawed

This week the FDA made available the long-awaited final memorandum of understanding with states on the interstate distribution of inordinate quantities of compounded drugs. This version of the MOU is the fourth iteration – but the first “final” version – in the 20-plus years since its creation was mandated in amendments to the Food, Drug & Cosmetics Act.

In states that sign the MOU, pharmacies that ship more than 50 percent of their compounded drugs out of state will trigger state investigation and reporting requirements and the state board of pharmacy will be required to report adverse events to the FDA. Pharmacies in states that don’t sign the MOU will be prohibited from distributing more than five percent of their compounded drugs out of state.

Obviously, a five percent cap on out-of-state shipment of compounded preparations would have a profound chilling effect on patient access to certain compounded drugs. That’s why, over the past two decades, APC has urged FDA to make essential changes to the previous drafts of the MOU. Our aim has been twofold: to assure, first, that the lawful and proper provision of compounded meds to patients, pursuant to a prescription and regardless of their state of residence, is preserved; and second, that the final MOU is one that states can live with and will actually sign.

This latest version of the MOU incorporates some of the suggestions APC and other stakeholders made in relation to the requirements on states, and those changes may serve has helpful inducements for states to sign the MOU.

However, the final MOU still redefines the key term “distribution” to include the patient-specific dispensing of compounded drugs – in other words, applying the term distribution to include traditional dispensing of medications pursuant to a patient-specific prescription, an area appropriately regulated by state boards of pharmacy under state law. This redefining of a key term is inconsistent not only with the plain statutory language of the Food, Drug & Cosmetic Act, but with the definition of the term “distribution” in every other appertaining federal law. Concern about that inconsistency has been raised in multiple letters from members of Congress to the FDA, statements in the congressional record, appropriations report language directives, and the overwhelming consensus of stakeholder input to the agency on this issue.

In states that choose for whatever reason not to sign the MOU, pharmacies will be limited to shipping no more than five percent of ALL compounded drugs (including those dispensed with a prescription) out of state. Enforcement of a five percent cap on that kind of traditional, patient-specific dispensing – as opposed to applying the cap only to distributions of drugs in larger quantities without a prescription – could deprive patients of needed medications. Moreover, it’s simply not supported by the statute and will undoubtedly trigger lengthy and expensive litigation, tying up the issue in the courts for a long time.

It’s particularly disappointing given the lengths APC and other stakeholders went to in providing FDA suggestions for a very narrow, limited definition of “distribution” for the purposes of the MOU that would meet the statute’s intent, satisfy FDA’s information needs, and avoid legal action.

The timing of the release of this final MOU is curious given temporary guidance FDA issued on April 20 that allows 503A pharmacies to actually distribute (without a patient-specific prescription) certain compounded COVID-19 treatment drugs to hospitals when those drugs are unavailable commercially or from 503B outsourcing facilities.

APC is studying the MOU and will continue working with our allies in Congress and other pharmacy stakeholders and organizations representing providers and patients who rely on compounded drugs to effect policy outcomes that are both safe and protect patient access to the medicines they need.