Pharmacies Win Round One of FDA Compounding MOU Challenge

In a win for pharmacy in the decade long squirmish between FDA and compounding pharmacies, FDA has been ordered to conduct a review of its MOU. The MOU establishes an understanding between individual State Boards of Pharmacy and the FDA involving reporting of interstate distribution of “inordinate amounts” of compounded drugs.  For states that do not sign, and several have already indicated they will not (deadline extended to October 2022), the limit on distribution is 5% of the pharmacies’ total prescription orders (i.e. the 5% limit).

In Wellness Pharmacy Inc. et al. v. Becerra et al.,[1] seven compounding pharmacies located in Alabama, Colorado, New York, Wisconsin, Pennsylvania, Utah and California asserted three claims, two of which were procedural issues. The first claim was that the MOU is a legislative rule for which FDA needed to follow the Regulatory Flexibility Act to assess the impact on pharmacies. The pharmacies claimed the MOU would result in both compliance costs and for those states that do not sign, pharmacy closures. The second procedural issue the pharmacies argued was that FDA bypassed the Administrative Procedures Act notice-and-comment rulemaking process. The court agreed and ordered FDA to conduct a review of the MOU and a Regulatory Flexibility Analysis. The third claim asserted by the pharmacies, and perhaps the most contentious, is that FDA exceeded its statutory authority under Section 503(a)[2] in conflating the terms “dispensing” and “distribution.” FDA argued standing, ripeness of claims, and a “reasonable” interpretation of section 503(a). Various amici briefs were filed on either side by compounding groups for the plaintiffs and pharmaceutical manufacturers for the defendants.

In remanding the MOU, the court did not decide the “dispensing” vs “distribution” count. Stay tuned, as FDA must submit a report to the court within 60 days.

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 interstate distribution threshold, Adverse Drug Event and quality reporting requirements, or preparing SOPs in accordance with the MOU. 


[1] Case Number 1:20-cv-03082, U.S. Dist Ct for the District of Columbia.

[2] 21 U.S.C. § 353(a).