0800 503A final std MOU FDA Cleared

MEMORANDUM OF UNDERSTANDING ADDRESSING CERTAIN
DISTRIBUTIONS OF COMPOUNDED HUMAN DRUG PRODUCTS
BETWEEN THE [insert STATE BOARD OF PHARMACY OR OTHER
APPROPRIATE STATE AGENCY] AND
THE U.S. FOOD AND DRUG ADMINISTRATION

I.

PURPOSE
This Memorandum of Understanding (MOU) establishes an agreement between
the [insert State Board of Pharmacy or other appropriate State agency] and the
U.S. Food and Drug Administration (FDA) regarding the distribution of
inordinate amounts of compounded human drug products interstate 1 and the
appropriate investigation by the [insert State Board of Pharmacy or other
appropriate State agency] of complaints relating to human drug products
compounded in [insert State] and distributed outside such State. 2 This is the
MOU provided for by section 503A(b)(3)(B)(i) of the Federal Food, Drug, and
Cosmetic Act (the FD&C Act) (21 U.S.C. 353a), and does not apply to veterinary
drug products, biological products subject to licensure under section 351 of the
Public Health Service Act (42 U.S.C. 262), and drugs that are compounded by
outsourcing facilities under section 503B of the FD&C Act.

II.

BACKGROUND
a. Section 503A of the FD&C Act describes the conditions that must be satisfied
for human drug products compounded by a licensed pharmacist or licensed
physician to be exempt from three sections of the FD&C Act requiring:
1. Compliance with current good manufacturing practice (section
501(a)(2)(B) (21 U.S.C. 351(a)(2)(B));
2. Labeling with adequate directions for use (section 502(f)(1) (21 U.S.C.
352(f)(1)); and
3. FDA approval prior to marketing (section 505 (21 U.S.C. 355)).

1

For purposes of this MOU, see the definitions of “inordinate amounts” and “distribution of compounded
human drug products interstate” (also referred to as “distributed interstate”) in Appendix A.
2
As described herein, the State Board of Pharmacy or other appropriate State agency signatory is agreeing
to take certain actions as described in Section III below. For example, if a State Board of Pharmacy signs
the MOU, the State Board of Pharmacy agrees to take the actions described in Section III below with
respect to drugs compounded by pharmacies in that State; in addition, the State Board of Pharmacy agrees
that if it receives information about complaints or becomes aware of information about drugs compounded
by physicians in the State and distributed interstate, it will forward the information to FDA and the
appropriate State regulator of physicians as described in Section III.

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b. To qualify for these exemptions, a compounded human drug product must,
among other things, 3 meet the conditions in section 503A(b)(3)(B) of the
FD&C Act, under which the drug product is compounded in a State that:
1. Has entered into an MOU with FDA that addresses the distribution of
inordinate amounts of compounded drug products interstate and
provides for appropriate investigation by a State agency of complaints
relating to compounded drug products distributed outside such State
(section 503A(b)(3)(B)(i)); or
2. Has not entered into an MOU with FDA and the licensed pharmacist,
licensed pharmacy, or licensed physician distributes (or causes to be
distributed) compounded drug products out of the State in which they
are compounded in quantities that do not exceed 5 percent of the total
prescription orders dispensed or distributed by such pharmacy or
physician (section 503A(b)(3)(B)(ii)).
c. Section 503A(b)(3) of the FD&C Act directs FDA to develop a standard
MOU, in consultation with the National Association of Boards of Pharmacy
(NABP), for use by the States in complying with section 503A(b)(3)(B)(i).
This MOU is the standard MOU developed by FDA for this purpose.
III.

SUBSTANCE OF AGREEMENT
a. Investigation of Complaints Relating to Compounded Human Drug Products
Distributed Outside the State
1. The [insert State Board of Pharmacy or other appropriate State agency]
will investigate complaints of adverse drug experiences and product
quality issues 4 relating to human drug products compounded at a
pharmacy in [insert State] and distributed outside the State. Any
investigations will be performed pursuant to the [insert State Board of
Pharmacy or other appropriate State agency]’s established
investigatory policies and procedures, including those related to
prioritizing complaints, provided they are not in conflict with the terms
of this MOU.
2. Any investigations performed by the [insert State Board of Pharmacy
or other appropriate State agency] under this MOU will include taking
steps to assess (1) whether there is a public health risk associated with
the compounded drug product; and (2) whether any public health risk
associated with the product is adequately contained.

3

To qualify for the exemptions under section 503A, a compounder must obtain a prescription for an
individually identified patient (section 503A(a) of the FD&C Act). This MOU does not alter this condition.
4
For purposes of this MOU, see the definitions of “adverse drug experience” and “product quality issue” in
Appendix A.

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3. After the [insert State Board of Pharmacy or other appropriate State
agency]’s investigation, if the complaint is substantiated, the [insert
State Board of Pharmacy or other appropriate State agency], in
accordance with and as permitted by State law, will take the action that
the [insert State Board of Pharmacy or other appropriate State agency]
considers to be appropriate and warranted to ensure that the relevant
pharmacy investigates the root cause of the problem that is the subject
of the complaint and undertakes sufficient corrective action to address
any identified public health risk relating to the problem, including the
risk that future similar problems may occur.
4. The [insert State Board of Pharmacy or other appropriate State agency]
will maintain records of the complaint about adverse drug experiences
or product quality issues relating to human drug products compounded
at a pharmacy, the investigation of the complaint, and any response to
or action taken as a result of the complaint, beginning when the [insert
State Board of Pharmacy or other appropriate State agency] receives
notice of the complaint. The [insert State Board of Pharmacy or other
appropriate State agency] will maintain these records for at least 3
years. The 3-year period begins on the date of final action on a
complaint, or the date of a decision that the complaint requires no
action.
5. As soon as possible, but no later than 5 business days after receiving a
complaint involving a serious adverse drug experience or serious
product quality issue relating to a drug product compounded at a
pharmacy and distributed outside the State, the [insert State Board of
Pharmacy or other appropriate State agency] will, by submission to an
Information Sharing Network 5 or by email to
StateMOU@fda.hhs.gov, provide FDA with the information described
in the Submission and Disclosure of Information section of this MOU
(section III.c.1.a.i-iii). 6
6. After the [insert State Board of Pharmacy or other appropriate State
agency] concludes its investigation of a complaint assessed to involve
a serious adverse drug experience or serious product quality issue
relating to a drug product compounded at a pharmacy and distributed
outside the State, the [insert State Board of Pharmacy or other
5

For purposes of this MOU, see the definitions of “serious adverse drug experience,” “serious product
quality issue,” and “Information Sharing Network” in Appendix A.
6
The information includes the following: (i) Name and contact information of the complainant, if
available; (ii) Name and address of the pharmacy that is the subject of the complaint; and (iii) Description
of the complaint, including a description of any compounded human drug product that is the subject of the
complaint.

3

appropriate State agency] will share with FDA, as described in the
Submission and Disclosure of Information section of this MOU
(section III.c.1.a.iv-v), 7 the results of the investigation as permitted by
State law.
7. If the [insert State Board of Pharmacy or other appropriate State
agency] receives a complaint involving an adverse drug experience or
product quality issue relating to a human drug product compounded by
a physician and distributed outside the State, the [insert State Board of
Pharmacy or other appropriate State agency] will notify the
appropriate regulator of physicians within the State. The [insert State
Board of Pharmacy or other appropriate State agency] will also notify
FDA by submission to an Information Sharing Network or by sending
an email to StateMOU@fda.hhs.gov with the information described in
the Submission and Disclosure of Information section of this MOU
(section III.c.2.a.-c), if available, as soon as possible, but no later than
5 business days, after receiving the complaint.
b. Distribution of Inordinate Amounts of Compounded Human Drug Products
Interstate 8
1. For purposes of this MOU, 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.

7

The information includes: (i) [Insert State Board of Pharmacy or other appropriate State agency]’s
assessment of whether the complaint was substantiated, if available; and (ii) Description and date of any
actions the [insert State Board of Pharmacy or other appropriate State agency] has taken to address the
complaint.
8
The distribution of inordinate amounts of compounded human drug products interstate is a threshold for
the [insert State Board of Pharmacy or other appropriate State agency] to identify and report certain
information to FDA, not a limit on the distribution of compounded human drug products interstate.

4

Figure 1. Calculating an Inordinate Amount

𝐴𝐴

𝐵𝐵

= 𝑋𝑋, where:

A = Number of prescription orders for compounded human drug products that the pharmacy
distributed interstate during any calendar year
B = The sum of the number of prescription orders for compounded human drug products (i) 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

If X is greater than 0.5, it is an inordinate amount and is a threshold for certain information
identification and reporting under the MOU.

2. On an annual basis, the [insert State Board of Pharmacy or other
appropriate State agency] will identify, using surveys, reviews of
records during inspections, data submitted to an Information Sharing
Network, or other mechanisms available to the [insert State Board of
Pharmacy or other appropriate State agency], pharmacies that
distribute inordinate amounts of compounded human drug products
interstate.
3. For pharmacies that have been identified as distributing inordinate
amounts of compounded human drug products interstate during any
calendar year, the [insert State Board of Pharmacy or other appropriate
State agency] will identify, using data submitted to an Information
Sharing Network or other available mechanisms, during that same
calendar year:
a. the total number of prescription orders for sterile compounded
human drugs distributed interstate;
b. the names of States in which the pharmacy is licensed;
c. the names of States into which the pharmacy distributed
compounded human drug products; and
d. whether the State inspected for and found during its most
recent inspection that the pharmacy distributed compounded
human drug products without valid prescription orders for
individually identified patients.
4. The [insert State Board of Pharmacy or other appropriate State agency]
will, within 30 business days of identifying a pharmacy that has
distributed inordinate amounts of compounded human drug products
interstate, notify FDA of such pharmacy, through an Information Sharing
Network or by email to StateMOU@fda.hhs.gov, and will include the

5

information described in the Submission and Disclosure of Information
section of this MOU (section III.c.1.b).
5. If the [insert State Board of Pharmacy or other appropriate State agency]
becomes aware of a physician who is distributing any amount of
compounded human drug products interstate, the [insert State Board of
Pharmacy or other appropriate State agency] will notify the appropriate
regulator of physicians within the State. The [insert State Board of
Pharmacy or other appropriate State agency] will, within 30 business days
of identifying a physician who is distributing any amount of compounded
human drug products interstate, also notify FDA by submission to an
Information Sharing Network or by email to StateMOU@fda.hhs.gov.
c. Submission and Disclosure of Information
1. When submitting information using StateMOU@fda.hhs.gov
regarding complaints relating to human drug products compounded by
a pharmacy and distributed outside the State, or regarding distribution
of inordinate amounts of human drug products compounded by a
pharmacy interstate, the following minimum information will be
included. Note, this information can be submitted to an Information
Sharing Network for sharing with FDA.
a. Complaints:
i.

Name and contact information of the complainant, if
available;

ii.

Name and address of the pharmacy that is the subject of the
complaint;

iii.

Description of the complaint, including a description of any
compounded human drug product that is the subject of the
complaint;

iv.

[Insert State Board of Pharmacy or other appropriate State
agency]’s assessment of whether the complaint was
substantiated, if available; and

v.

Description and date of any actions the [insert State Board
of Pharmacy or other appropriate State agency] has taken to
address the complaint.

b. Inordinate Amounts:

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i.

Name and address of the pharmacy that distributed
inordinate amounts of compounded human drug products
interstate;

ii.

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;

iii.

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;

iv.

The total number of prescription orders for compounded
human drug products distributed interstate during that same
calendar year;

v.

The total number of prescription orders for sterile
compounded human drug products distributed interstate
during that same calendar year;

vi.

The names of States in which the pharmacy is licensed and
the names of States into which the pharmacy distributed
compounded human drug products during that same
calendar year; and

vii.

Whether the [insert State Board of Pharmacy or other
appropriate State agency] inspected for and found during its
most recent inspection that the pharmacy distributed
compounded human drug products without valid
prescription orders for individually identified patients
during that same calendar year.

2. When submitting information using StateMOU@fda.hhs.gov
regarding complaints relating to human drug products compounded by
a physician, or regarding distribution of any amount of human drug
products compounded by a physician interstate, the following
minimum information will be included, if available. Note, this
information can be submitted to an Information Sharing Network for
sharing with FDA.
a. Name and contact information of the complainant or notifier;
b. Name and address of the physician that is the subject of the
complaint or notification; and

7

c. Description of the complaint or notification, including a
description of any compounded human drug product that is the
subject of the complaint or notification.
3. The parties to this MOU will share information consistent with
applicable statutes and regulations. The parties recognize that a
separate agreement under 21 CFR 20.88 may be necessary before FDA
can share information that is protected from public disclosure. Such
an agreement will govern FDA’s sharing of the following types of
information:
•

Confidential commercial information, such as information that
would be protected from public disclosure under Exemption 4
of the Freedom of Information Act (FOIA) (5
U.S.C. 552(b)(4));

•

Personal privacy information, such as information that would
be protected from public disclosure under Exemption 6 or 7(C)
of the FOIA (5 U.S.C. 552(b)(6) and(7)(C)); or

•

Information that is otherwise protected from public disclosure
by Federal statutes and their implementing regulations (e.g.,
the Trade Secrets Act (18 U.S.C. 1905), the Privacy Act (5
U.S.C. 552a), other FOIA exemptions not mentioned above (5
U.S.C. 552(b)), the Health Insurance Portability and
Accountability Act (Public Law 104-191), and FDA’s
regulations in parts 20 and 21 (21 CFR parts 20 and 21)).

FDA agrees that information provided to FDA by the [insert State
Board of Pharmacy or other appropriate State agency] will only be
disclosed consistent with applicable Federal law and regulations
governing the disclosure of such information, including the FOIA (5
U.S.C. 552(b)), the FD&C Act (21 U.S.C. 301 et seq.), 21 U.S.C.
331(j), 21 U.S.C. 360j(c), the Trade Secrets Act (18 U.S.C. 1905),
FDA’s regulations in 21 CFR parts 20 and 21, and other pertinent laws
and regulations.
IV.

ENFORCEMENT AUTHORITIES AND LEGAL STATUS OF
AGREEMENT
The parties to this MOU recognize that FDA and the [insert State Board of
Pharmacy or other appropriate State agency] retain the statutory and regulatory
authorities provided by the FD&C Act, other Federal statutes and attendant
regulations, and State statutes and regulations. The parties also recognize that this
agreement does not restrict FDA or any other Federal agency from taking

8

enforcement action, when appropriate, to ensure compliance with Federal statutes,
including the FD&C Act and attendant regulations, or prevent the [insert State
Board of Pharmacy or other appropriate State agency] from taking enforcement
action, as appropriate, to ensure compliance with applicable State statutes and
regulations. This MOU does not create or confer any rights for or on any person.
By signing this MOU, the [insert State Board of Pharmacy or other appropriate
State agency] affirms that it now possesses and will maintain, at the discretion of
the State legislature, the legal authority (under State statutes and/or regulations)
and the resources necessary to effectively carry out all aspects of this MOU. If
State law changes such that the [insert State Board of Pharmacy or other
appropriate State agency] no longer has the legal authority or resources necessary
to effectively carry out all aspects of this MOU, the [insert State Board of
Pharmacy or other appropriate State agency] will notify FDA within 60 calendar
days of the change in legal authority.
V.

NAME AND ADDRESS OF PARTICIPATING AGENCIES
U.S. Food and Drug Administration
Center for Drug Evaluation and Research
Office of Compliance
Office of Unapproved Drugs and Labeling Compliance
10903 New Hampshire Avenue
Bldg. 51, Suite 5100
Silver Spring, MD 20993-0002
Telephone: (301) 796-3110
Email: StateMOU@fda.hhs.gov
[Insert State Board of Pharmacy or other appropriate State agency and its contact
information]

Upon signing the MOU, each party must designate one or more liaisons to act as
points of contact. Each party may designate new liaisons at any time by notifying
the other party’s liaison(s) in writing. If, at any time, an individual designated as
a liaison under this agreement becomes unavailable to fulfill those functions, the
parties will name a new liaison within 2 weeks and notify the other party’s
liaison(s).
VI.

PERIOD OF AGREEMENT
a. When accepted by both parties, this MOU will be effective from the date of
the last signature and will continue until terminated by either party. It may be
terminated in writing by either party, upon a 60 calendar day notice of
termination. Notice of termination will be sent to the address listed in section
V of this MOU.

9

b. If the [State Board of Pharmacy or other appropriate State agency] does not
adhere to the provisions of this MOU, including conducting an investigation
of complaints related to compounded human drug products distributed outside
the State, the MOU may be terminated upon a 60 calendar day notice of
termination.
In case of termination, FDA will post a notice of the termination on its Web site
and the [insert State Board of Pharmacy or other appropriate State agency] will
notify all pharmacies that compound drug products in the State and notify the
State authority that licenses or regulates physicians of the termination and advise
them that as of 60 calendar days from the date of the posting of the termination
notice, compounded human drug products may be distributed (or caused to be
distributed) out of the State only “in quantities that do not exceed 5 percent of the
total prescription orders dispensed or distributed” by the licensed pharmacy or
physician (section 503A(b)(3)(B)(ii) of the FD&C Act).
VII.

APPROVALS
APPROVED AND ACCEPTED FOR
THE U.S. FOOD AND DRUG
ADMINISTRATION

APPROVED AND ACCEPTED FOR
[insert State Board of Pharmacy or
other appropriate State agency]

By (Type Name)
Title
Date

By (Type Name)
Title
Date

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Appendix A. Definition of Terms for the Purposes of this MOU
•

Adverse Drug Experience: Any adverse event associated with the use of a drug
in humans, whether or not considered drug related, including the following: an
adverse event occurring in the course of the use of a drug product in professional
practice; an adverse event occurring from drug overdose, whether accidental or
intentional; an adverse event occurring from drug abuse; an adverse event
occurring from drug withdrawal; and any failure of expected pharmacological
action (21 CFR 310.305(b)).

•

Distribution of compounded human drug products interstate: Means that a
pharmacy or physician has sent (or caused to be sent) a compounded drug product
out of the State in which the drug was compounded.

•

Information Sharing Network: An information sharing network designated by
FDA for purposes of this MOU to collect, assess, and allow review and sharing of
information pursuant to this MOU.

•

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. 9

•

Product Quality Issue: Information concerning (1) any incident that causes the
drug product or its labeling to be mistaken for, or applied to, another article; or (2)
any bacteriological contamination; any significant chemical, physical, or other
change or deterioration in the distributed drug product; or any failure of one or
more distributed batches of the drug product to meet the applicable specifications
(21 CFR 314.81(b)(1)). Contamination in general, including but not limited to
mold, fungal, bacterial, or particulate contamination, is a product quality issue.

•

Serious Adverse Drug Experience: Any adverse drug experience occurring at
any dose that results in any of the following outcomes: death, a life-threatening
adverse drug experience, inpatient hospitalization or prolongation of existing
hospitalization, a persistent or significant disability/incapacity, or a congenital

9

The definition of inordinate amounts in this MOU is separate and distinct from and should not be used in
relation to the term inordinate amounts as it is used in section 503A(b)(1)(D) of the FD&C Act (pertaining
to compounding a drug product that is essentially a copy of a commercially available drug product). The
interpretation of this term in each instance necessarily is based on the particular context of the distinct
provisions within 503A in which the term appears.

11

anomaly/birth defect. Important medical events that may not result in death, be
life-threatening, or require hospitalization may be considered a serious adverse
drug experience when, based upon appropriate medical judgment, they may
jeopardize the patient or subject and may require medical or surgical intervention
to prevent one of the outcomes listed in this definition. Examples of such medical
events include allergic bronchospasm requiring intensive treatment in an
emergency room or at home, blood dyscrasias or convulsions that do not result in
inpatient hospitalization, or the development of drug dependency or drug abuse
(21 CFR 310.305(b)).
•

Serious Product Quality Issue: Any product quality issue that may have the
potential to cause a serious adverse drug experience (e.g., possible contamination,
superpotent product).

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