10. The drug product is compounded in a state that has entered into a memorandum of understanding (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; or, in states that have not entered into such an MOU with FDA, the licensed pharmacist, licensed pharmacy, or licensed physician does not distribute, or cause to be distributed, compounded drug products out of the state in which they are compounded, more than 5% of the total prescription orders dispensed or distributed by such pharmacy or physician (sections 503A(b)(3)(B)(i) & (ii) of the FD&C Act). See section III.B.4 below for the interim policy for this provision.
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4. Memorandum of Understanding Between FDA and the States
Section 503A(b)(3) of the FD&C Act states that FDA, in consultation with the National Association of Boards of Pharmacy (NABP) will develop a standard MOU for use between FDA and the states that will address the interstate distribution of inordinate amounts of compounded drug products and provide for appropriate investigation by a state agency of complaints relating to compounded drug products distributed outside that state. On January 21, 1999, FDA published a notice in the Federal Register announcing the availability of a draft standard MOU, developed in consultation with the NABP. This draft MOU was not finalized. FDA intends to publish a new draft MOU for comment that will replace the January 1999 draft.
Under section 503A(b)(3)(B)(ii), an individual or firm in a state that does not enter into an MOU with FDA that distributes, or causes to be distributed, compounded drug products out of the state in which they are compounded, can compound for interstate distribution outside the state only 5% of the total prescription orders dispensed or distributed by the individual or firm. FDA does not intend to enforce the 5% limit on interstate distribution until after FDA has finalized an MOU and made it available to the states for their consideration and signature. The Federal Register notice that will announce the availability of the draft MOU will specify a time period during which the MOU will be made available to the states to sign. After this time period expires, FDA intends to begin enforcing the 5% limit in states that have not signed the MOU.
Section 503A(b)(3) of the FD&C Act states that FDA, in consultation with the National Association of Boards of Pharmacy (NABP) will develop a standard MOU for use between FDA and the states that will address the interstate distribution of inordinate amounts of compounded drug products and provide for appropriate investigation by a state agency of complaints relating to compounded drug products distributed outside that state. On January 21, 1999, FDA published a notice in the Federal Register announcing the availability of a draft standard MOU, developed in consultation with the NABP. This draft MOU was not finalized. FDA intends to publish a new draft MOU for comment that will replace the January 1999 draft.
Under section 503A(b)(3)(B)(ii), an individual or firm in a state that does not enter into an MOU with FDA that distributes, or causes to be distributed, compounded drug products out of the state in which they are compounded, can compound for interstate distribution outside the state only 5% of the total prescription orders dispensed or distributed by the individual or firm. FDA does not intend to enforce the 5% limit on interstate distribution until after FDA has finalized an MOU and made it available to the states for their consideration and signature. The Federal Register notice that will announce the availability of the draft MOU will specify a time period during which the MOU will be made available to the states to sign. After this time period expires, FDA intends to begin enforcing the 5% limit in states that have not signed the MOU.
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