When FDA lawyers admitted in federal court in February that the agency failed to properly follow congressional instructions for creating a memorandum of understanding (MOU) with states regarding interstate drug distributions compounds, they finally seemed to heed Will Rogers’ advice: “If you find yourself in a hole, stop digging.
For the FDA, that hole is now 25 years deep. Its impetus was a congressional directive in 1997—part of revisions to the Food, Drug, and Cosmetic Act—that the agency execute a memorandum of understanding under which state pharmacy boards would communicate to the FDA certain information about state-licensed compounding pharmacies that distributed a large percentage of their compounded formulas across state lines.
As Congress designed it, the MOU would be voluntary, but the law would impose restrictions on pharmacies that ship compound drugs from states that have chosen not to sign it. Congress wanted it to be a consensus document, created through the formal rulemaking process, with state input and approval. In other words, Congress expected the FDA to draft a memorandum of understanding that states would be willing to sign.
But that’s not what the agency did. Instead, he started digging. After several proposed iterations over 24 years, the FDA finalized a Memorandum of Understanding in 2020 that:
• Has not been subject to the development of formal notice and comment rules.
• Failed to properly assess the economic impact on pharmacies and state pharmacy boards.
• Merging of 2 important definitions of the Pharmacy Act: “distribute” and “dispense”.
This culminated in a lawsuit against the agency by 7 compounding pharmacies, whose arguments partly found resonance with a federal judge and led to the FDA acknowledging its failures in court last February. Certainly, the agency did not entirely abandon its shovel during this court appearance. Instead, he laid out plans to start working on a new hole: come up with another version of the MOU, this time through the prescribed rule-making process he hadn’t gone through before.
But abandoning this MOU is precisely what the FDA should ask permission to do, because the specific problem for which the MOU was designed in 1997 no longer exists.
To understand why the MOU as envisioned by Congress is obsolete, let’s first go back to the previously mentioned definitions. In federal and state pharmacy law, the terms “distribute” and “dispenser” have remarkably consistent definitions.
The “distribution” is patient-specific; it is a drug prepared for an individual patient in accordance with a prescription from a physician or other prescriber. “Distributions”, on the other hand, are not patient-specific; the term applies to batches of compound drugs prepared for clinical or hospital administration by a physician to a patient, and a prescription is not required.
In 1997, when Congress authorized the creation of the MOU, it was to address compounding and distribution by traditional pharmacies of compounding non-patient-specific drugs for administration in the clinic. It was a practice generally allowed by most state laws at the time, but was later banned by Congress when it passed the Drug Quality and Safety Act (DQSA) in 2013.
Under the DQSA, traditional compounders were prohibited from compounding drugs for clinical use without a prescription. Not only that, but a new category of prep operations, called outsourcing facilities, has been created. These establishments would be allowed to distribute compound drugs to hospitals and clinics if they adhered to current good manufacturing practices, just as manufacturers of FDA-approved drugs do.
The DQSA eliminated the need for this 1997 MOU because traditional preparers could no longer do what the MOU was supposed to inform. Still, the requirement for a memorandum of understanding remained in the Food, Drug, and Cosmetic Act, so the FDA decided to dig a little deeper.
The agency re-drafted a memorandum of understanding that applied to both distributions and the distribution of compound drugs, even though Congress had only authorized the memorandum of understanding to cover distributions, and not patient-specific dispensing, which has long been regulated by state pharmacy boards. . This overbreadth led to the aforementioned lawsuit against the agency complicating pharmacies and that court appearance in February where the FDA climbed out of one hole and announced it would start another.
Here’s the thing, pharmacy compounders are not opposed to some level of reporting on compound drug shipments across state lines, even patient-specific compound drug shipments. Because it’s not unusual for the pharmacy that makes this personalized drug for your partner, child, or Aunt Sadie to be in a different state, it’s not unreasonable for state pharmacy boards and the FDA to want to know which pharmacies ship the majority of their compounded preparations out of state.
So, instead of digging a new hole, the FDA should join the compounding profession in changing the law. Eliminate this outdated memorandum of understanding requirement – a memorandum of understanding that several states have already said they can’t sign (due to state law) or won’t sign (due to administrative burden).
In its place, create a statutory regime for reporting shipping information to state pharmacy boards, to be shared with the FDA. Perhaps also create a narrow but permanent lane in statute for compounding pharmacies to alleviate drug supply chain issues by compounding urgent-use drugs in small batches for hospitals and clinics when these medicines are in national or regional shortage.
Stop fumbling with the FDA and let’s start building a new framework that delivers the reporting you want and maintains patient access to safe, life-enhancing compound medicines.
About the Author
Scott Brunner, CAE, is CEO of the Alliance for Pharmacy Compounding.