On August 9, 2021, the Food and Drug Administration (FDA) announced it would delay enforcement of the 5% limit on out-of-state shipments of compounded prescriptions until October 27, 2022.[1] States that sign the MOU commit to investigating, documenting and reporting to FDA any time a pharmacy ships more than 50% of its compounding drugs to out-of-state patients. If a compounding pharmacy is doing business in a state that has signed the MOU, the pharmacy will have increased regulatory burdens and requirements to share information. Pharmacies in the states that have indicated they will not sign the MOU will be restricted with a 5% limit on interstate distribution of compounded drug products, the “5% rule.”
Currently, there are legal challenges against the FDA, mostly by pharmacy groups who contend the FDA MOU has conflated “distribution” and “dispensing”[2],[3] (the latest lawsuit being brought by seven compounding pharmacies). Many compounders are hopeful that FDA will withdraw or revise the MOU but, to date, FDA has not moved from their position. FDA postponed the timeline so states can modify their laws and regulations in accordance with the MOU and to give more time for states to sign up (only CO and NH have done so). NABP is watching all of this very closely as the state Boards of Pharmacy (BOP) may be using their Information Sharing Network (ISN) Platform for reporting compounding prescription data to the FDA.
According to NABP, a majority of states are considering signing, but some have indicated that they will not sign, and others (including Texas and Florida) maintain current laws would preclude or conflict with the MOU and would need to revised. For pharmacies in states that do not sign, the outcome could be catastrophic as the FDA begins enforcing the 5% cap starting October 27, 2022. Keep in mind that states can sign the MOU at any time (include after October 27, 2022) and may not need to revise their regulations. The BOPs may then quickly start requesting compounding data files or may require the data as a condition for renewal, including the following:
- Number of prescription orders for compounded drugs the pharmacy sent out
- Number of prescription orders for compounded drugs dispensed at the facility
- Total number of prescription orders for compounded drugs sent out or dispensed at the facility
- Total number of prescription orders for compounded drugs distributed interstate
- Percentage of compounded drugs distributed interstate
- Number of prescription orders for sterile compounded drugs distributed interstate
- List of states in which pharmacy is licensed
- List of states into which pharmacy distributed compounded drugs during the year
- Whether compounded drugs are distributed without patient-specific prescriptions
- Adverse Drug Event and Quality complaints
503(a) pharmacies must begin to prepare for next October when enforcement of the 5% rule for states that do not sign or the 50% rule for states that do sign will begin. The first thing compounders can do is reach out to their BOPs to attempt to ascertain the BOP’s position on the MOU. Are they going to be signing? Second, your pharmacy should begin to ensure that you are not exceeding 50% of compounding prescriptions being shipped out of state or can account for same. The 50% will be a trigger for FDA and BOP reporting which can then lead to inspections and requests for additional information.[4] More than 50% can be perfectly legal, but represents a trigger, requiring the submission of additional data to the BOP and possibly the FDA for the pharmacy to continue serving its patients.[5] Third, 503(a) pharmacies should make sure they have SOPs and systems in place for reports of serious adverse drug experiences or product quality issues. This data must be provided to FDA within 5 business days and should be readily retrievable should the BOP request it. Some states may require reporting within very short time frames, such as within 24 hours. Finally, compounders need to assess the impact on their business for states that have clearly already decided they will not be signing, as they will have 5% rules in place.
How Frier Levitt Can Help
Frier Levitt’s FDA and regulatory attorneys continue to work with our pharmacy compounding clients to make efforts to ensure patient access to compounded medications. Contact us if your pharmacy needs assistance navigating the MOU’s 50% limit, ADE and quality reporting requirements, or preparing SOPs in accordance with the MOU.
[1] FDA Notice. Extension of the Period Before the FDA Intends to Begin Enforcing the Statutory 5 Percent Limit on Out of State Distribution of Compounded Human Drug Products. 86 FR 43550. August 9, 2021.
[2] Thus, defacto providing FDA its long sought goal of regulatory authority over the act of pharmacy dispensing.
[3] Wellness Pharmacy Inc., et al v. Azar, et al. 1:20-cv-03082 (U.S. Dist. Ct. 2020).
[4] Inordinate Amounts: 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: (i) 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 (ii) 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. (i) refers to the number of prescription orders that were shipped or mailed out, regardless of whether the products went in state of out of state.
[5] Unlike the 5% rule which is a statutory limit under Sec 503(a) of the FDC Act, there is no current statutory authority for the 50% rule. It is a threshold, not a limit. Pharmacies who exceed the 50% threshold will have their data reported to FDA but will not necessarily be automatically inspected. Nor will they be required to stop serving patients.
