B. Inordinate Amounts
The new draft standard MOU provides that States that enter into the MOU will agree to:
- Review compounding records during inspections of compounding pharmacies to identify whether the compounding pharmacy, or the compounding pharmacist or physician, is distributing inordinate amounts of compounded human drug products interstate;
- Notify FDA if the State identifies any pharmacy, pharmacist, or physician within its jurisdiction that has distributed inordinate amounts of compounded human drug products interstate;
- Take action regarding any pharmacy, pharmacist, or physician that distributes inordinate amounts of compounded human drug products interstate; and
- Provide FDA with certain information, including the following:
○ The name and address of the pharmacy/pharmacist/physician;
○ a description of the evidence indicating that the pharmacy/pharmacist/physician has distributed inordinate amounts of compounded human drug products interstate, including a description of any compounded drug product that was distributed in inordinate amounts; and
○ a description and date of any actions the State has taken to address the distribution of inordinate amounts of compounded human drug product interstate.
In the new draft standard MOU, a pharmacist, pharmacy, or physician is considered to have distributed an inordinate amount of compounded human drug products interstate if the number of units of compounded human drug products distributed interstate during any calendar month is equal to or greater than 30 percent of the number of units of compounded and non-compounded drug products distributed or dispensed both intrastate and interstate by such pharmacist, pharmacy, or physician during that calendar month. FDA does not intend to include in the consideration of inordinate amounts those prescriptions dispensed to a patient (or patient's agent), where the patient (or patient's agent) to whom the drug is dispensed carries the drug across State lines after it has been dispensed to the patient (or the patient's agent) at the facility in which the drug was compounded. [3]This concept would be called the 30 percent limit.
The 1999 draft standard MOU defined “inordinate amounts” as the number of compounded prescriptions dispensed or distributed interstate annually by a pharmacy or physician that is equal to or greater than 20 percent of the total number of prescriptions dispensed or distributed (including both intrastate and interstate) by such pharmacy or physician; or the number of compounded prescriptions dispensed or distributed interstate annually by a pharmacy or physician that is less than 20 percent of the total number of prescriptions dispensed or distributed (including both intrastate and interstate) by such pharmacy or physician, but prescriptions for one or more individual compounded drug products (including various strengths of the same active ingredient) dispensed or distributed interstate constitute more than 5 percent of the total number of prescriptions dispensed or distributed. The 1999 draft standard MOU also included an exclusion from calculations to determine inordinate amounts for “local” interstate distribution to patients within 50 miles of the compounding pharmacy, and for interstate distribution in response to a public health emergency or catastrophic event.
Many comments on the 1999 draft standard MOU opposed the percentage limits it contained, and some comments on the 2013 draft 503A guidance opposed any definition of inordinate amounts that would significantly restrict interstate distributions under section 503A of the FD&C Act. Other comments suggested not defining “inordinate amounts,” leaving the definition up to the States, or defining the term as “the amount that would be considered conventional manufacturing.” FDA is proposing the 30 percent limit as the definition of “inordinate amounts” for the following reasons.
Section 503A of the FD&C Act reflects Congress' recognition that human drug compounding may be appropriate when it is based on receiving a valid prescription or notation for an identified individual patient. However, drug products compounded under this section of the FD&C Act are not required to demonstrate that they are safe or effective, bear adequate directions for use, or conform to CGMP. Congress, therefore, imposed strict limits on the distribution of drug products compounded under this section to protect the public health and the integrity of the drug approval process.
In particular, Congress did not intend for compounders operating under these statutory provisions to grow into conventional manufacturing operations making unapproved drugs, operating a substantial proportion of their business interstate. Although other provisions of the FD&C Act apply to state-licensed pharmacies and physicians that may qualify for the exemptions under section 503A of the FD&C Act (e.g., the adulteration provisions for making drugs under insanitary conditions), and although FDA may take action in appropriate cases against compounders that violate these provisions or that operate outside of the conditions in section 503A, Congress recognized that these compounders are primarily overseen by the States. If a substantial proportion of a compounder's drugs are distributed outside a State's borders, adequate regulation of those drugs poses significant challenges to State regulators. States face logistical, regulatory, and financial challenges inspecting compounders located outside of their jurisdiction. In addition, particularly if a compounder distributes drugs to multiple States, it can be very difficult to gather the scattered information about possible adverse events associated with those drugs, connect them to the compounder, and undertake coordinated action to address a potentially serious public health problem.
Therefore, as a baseline measure, section 503A(b)(3)(B) of the FD&C Act limits the distribution of compounded human drug products outside of the State in which they are compounded under section 503A(a) to 5 percent of the total prescription orders dispensed or distributed by a licensed pharmacist, pharmacy, or physician. It then directs FDA, in consultation with NABP, to develop a standard MOU that addresses the distribution of inordinate amounts of compounded human drug products interstate and provides for appropriateinvestigation by a State agency of complaints relating to compounded human drug products distributed outside such State. Implementation of this provision requires FDA to determine whether a limit higher than 5 percent would be appropriate, provided the States make certain agreements: A State agrees to appropriately investigate complaints relating to compounded human drug products distributed out of the State and agrees to address the distribution of amounts that would be inordinate.
FDA tentatively concludes that if a State agrees to meet the conditions set forth in this MOU, distribution interstate up to the 30 percent limit would not be inordinate. This conclusion is based on FDA's expectation that States signing the MOU would appropriately investigate complaints about compounded human drug products distributed out of State, and address compounders distributing an inordinate amount of compounded drug products out of the state in which they are compounded. FDA's current view is that its proposed limit would appropriately balance the benefits of access to compounded human drug products with the need to protect the public health and the drug approval system. We do not believe that an additional limit is necessary for the distribution of an individual compounded drug product such as that contained in the 1999 draft standard MOU.
In developing the new draft standard MOU, we considered that patients can now obtain compounded human drug products from outsourcing facilities, [4] which are not subject to volume restrictions on interstate distribution. This could mitigate the access concerns noted in some comments FDA received on the definition of “inordinate amounts” in the 1999 draft standard MOU, and in more recent comments expressing concerns about access if “inordinate amounts” is defined restrictively or the 5 percent limit is enforced.
It is appropriate to provide a bright line test for when compounding pharmacies located in States that sign the MOU cross the line to conventional manufacturing that should be subject to all of the requirements of the FD&C Act, including the new drug approval and CGMP requirements. Congress provided such a bright line test, the 5 percent limit, for compounders located in States that do not sign the MOU.
Some commenters in response to the 1999 draft MOU and the 2013 draft 503A guidance were concerned with limitations on interstate distribution of compounded human drug products to contiguous States. In the 1999 draft MOU, the calculation of “inordinate amounts” excluded compounded human drug products that were distributed interstate but within 50 miles of the pharmacy or physician's office. After considering the provision in the 1999 draft MOU and the comments, FDA believes that the 30 percent limit on inordinate amounts provided in this new draft standard MOU is high enough that special calculations to address interstate distribution between contiguous States or over short distances are not needed. Moreover, the new draft standard MOU includes consideration of inordinate amounts of prescriptions dispensed to a patient (or patient's agent), if the patient (or patient's agent) to whom the drug is dispensed carries the drug across State lines after it has been dispensed to the patient (or patient's agent) at the facility in which the drug was compounded. We also do not intend to count as part of the 5 percent limit on distribution out of the State prescriptions dispensed to a patient (or patient's agent), if the patient (or patient's agent) to whom the drug is dispensed carries the drug across State lines after it has been dispensed to the patient (or patient's agent) at the facility in which the drug was compounded. We believe this treatment of these transactions where there are direct relationships among the patient, the prescriber, and the pharmacist or physician compounding the drug is consistent with section 503A of the FD&C Act.
Finally, the new draft standard MOU does not exclude from the calculation of “inordinate amounts” interstate distributions in response to a public health emergency or catastrophic event. We believe the 30 percent limit affords adequate opportunity for interstate distributions and note that outsourcing facilities may be able to compound drugs in an emergency and drugs on FDA's drug shortage list, further mitigating access concerns.
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