83 FR 45631 - Memorandum of Understanding Addressing Certain Distributions of Compounded Drug Products Between the States and the Food and Drug Administration; Revised Draft; Availability

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration

Federal Register Volume 83, Issue 175 (September 10, 2018)

The Food and Drug Administration (FDA or the Agency) is announcing the availability for public comment of a revised draft standard memorandum of understanding (MOU) entitled ``Memorandum of Understanding Addressing Certain Distributions of Compounded Drug Products Between the State of [insert State] and the U.S. Food and Drug Administration'' (revised draft standard MOU). The revised draft standard MOU describes the responsibilities of a State that chooses to sign the MOU in investigating and responding to complaints related to compounded drug products compounded in the State and distributed outside the State and in addressing the interstate distribution of inordinate amounts of compounded drug products. FDA is also announcing the withdrawal of an earlier draft standard MOU entitled ``Memorandum of Understanding Addressing Certain Distributions of Compounded Human Drug Products Between the State of [insert State] and the U.S. Food and Drug Administration,'' which was issued in February 2015 (2015 draft standard MOU). The 2015 draft standard MOU is superseded by the revised draft standard MOU.

[Federal Register Volume 83, Number 175 (Monday, September 10, 2018)]
[Notices]
[Pages 45631-45640]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-19461]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2018-N-3065]


Memorandum of Understanding Addressing Certain Distributions of 
Compounded Drug Products Between the States and the Food and Drug 
Administration; Revised Draft; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability; withdrawal.

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SUMMARY: The Food and Drug Administration (FDA or the Agency) is 
announcing the availability for public comment of a revised draft 
standard memorandum of understanding (MOU) entitled ``Memorandum of 
Understanding Addressing Certain Distributions of Compounded Drug 
Products Between the State of [insert State] and the U.S. Food and Drug 
Administration'' (revised draft standard MOU). The revised draft 
standard MOU describes the responsibilities of a State that chooses to 
sign the MOU in investigating and responding to complaints related to 
compounded drug products compounded in the State and distributed 
outside the State and in addressing the interstate distribution of 
inordinate amounts of compounded drug products.
    FDA is also announcing the withdrawal of an earlier draft standard 
MOU entitled ``Memorandum of Understanding Addressing Certain 
Distributions of Compounded Human Drug Products Between the State of 
[insert State] and the U.S. Food and Drug Administration,'' which was 
issued in February 2015 (2015 draft standard MOU). The 2015 draft 
standard MOU is superseded by the revised draft standard MOU.

DATES: FDA is withdrawing its draft standard MOU that published on 
February 19, 2015 (80 FR 8874), as of September 10, 2018. Submit either 
electronic or written comments on the revised draft standard MOU by 
December 10, 2018, to ensure that the Agency considers your comment on 
this draft MOU before it begins work on the final version of the MOU. 
Submit either electronic or written comments on information collection 
issues under the Paperwork Reduction Act of 1995 by December 10, 2018 
(see the ``Paperwork Reduction Act of 1995'' section of this document).

ADDRESSES: You may submit comments on the MOU at any time as follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. Comments submitted 
electronically, including attachments, to https://www.regulations.gov 
will be posted to the docket unchanged. Because your comment will be 
made public, you are solely responsible for ensuring that your comment 
does not include any confidential information that you or a third party 
may not wish to be posted, such as medical information, your or anyone 
else's Social Security number, or confidential business information, 
such as a manufacturing process. Please note that if you include your 
name, contact information, or other information that identifies you in 
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential 
information that you do not wish to be made available to the public, 
submit the comment as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets 
Management Staff, FDA will post your comment, as well as any 
attachments, except for information submitted, marked and identified, 
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No. 
FDA-2018-N-3065 for ``Memorandum of Understanding Addressing Certain 
Distributions of Compounded Drug Products Between the States and the 
Food and Drug Administration; Revised Draft; Availability.'' Received 
comments will be placed in the docket and, except for those submitted 
as ``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. 
and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with 
confidential information that you do not wish to be made publicly 
available, submit your comments only as a written/paper submission. You 
should submit two copies total. One copy will include the information 
you claim to be confidential with a heading or cover note that states 
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will 
review this copy, including the claimed confidential information, in 
its consideration of comments. The second copy, which will have the 
claimed confidential information redacted/blacked out, will be 
available for public viewing and posted on https://www.regulations.gov. 
Submit both copies to the Dockets Management Staff. If you do not wish 
your name and contact information to be made publicly available, you 
can provide this information on the cover sheet and not in the body of 
your comments and you must identify this information as 
``confidential.'' Any information marked as ``confidential'' will not 
be disclosed except in accordance with 21 CFR 10.20 and other 
applicable disclosure law. For more information about FDA's posting of 
comments to public dockets, see 80 FR 56469, September 18, 2015, or 
access the information at: https://www.thefederalregister.org/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or 
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in 
the heading of this document, into the ``Search'' box and follow the 
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, 
Rm. 1061, Rockville, MD 20852.
    Submit written requests for single copies of the draft MOU to the 
Division of Drug Information, Center for Drug Evaluation and Research, 
Food and Drug Administration, 10001 New Hampshire Ave., Hillandale 
Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-
addressed adhesive label to assist that office in processing your 
requests. See the SUPPLEMENTARY INFORMATION section for electronic 
access to the draft document.

[[Page 45632]]


FOR FURTHER INFORMATION CONTACT: Sara Rothman, Center for Drug 
Evaluation and Research, Food and Drug Administration, 10903 New 
Hampshire Ave., Bldg. 51, Rm. 5197, Silver Spring, MD 20993-0002, 301-
796-3110.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 503A of the Federal Food, Drug, and Cosmetic Act (the FD&C 
Act) (21 U.S.C. 353a) describes the conditions that must be satisfied 
for drug products compounded by a licensed pharmacist or licensed 
physician to be exempt from the following sections of the FD&C Act: (1) 
Section 501(a)(2)(B) (21 U.S.C. 351(a)(2)(B)) (concerning current good 
manufacturing practice (CGMP) requirements), (2) section 502(f)(1) (21 
U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate 
directions for use), and (3) section 505 (21 U.S.C. 355) (concerning 
the approval of drugs under new drug applications or abbreviated new 
drug applications).
    One of the conditions to qualify for the exemptions listed in 
section 503A of the FD&C Act is that: (1) The drug product is 
compounded in a State that 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 drug products distributed 
outside such State or (2) if the drug product is compounded in a State 
that has not entered into such an MOU, the licensed pharmacist, 
pharmacy, or physician does not distribute, or cause to be distributed, 
compounded drug products out of the State in which they are compounded 
in quantities that exceed 5 percent of the total prescription orders 
dispensed or distributed by such pharmacy or physician (5 percent 
limit) (see section 503A(b)(3)(B)(i) and (ii) of the FD&C Act).
    Section 503A(b)(3)(B) of the FD&C Act directs FDA to develop, in 
consultation with the National Association of Boards of Pharmacy 
(NABP), a standard MOU for use by the States in complying with section 
503A(b)(3)(B)(i).

II. Previous Efforts To Develop a Standard MOU

    In the Federal Register of January 21, 1999 (64 FR 3301), FDA 
announced the availability for public comment of a draft standard MOU, 
developed in consultation with NABP (1999 draft standard MOU). Over 
6,000 commenters submitted comments on the 1999 draft standard MOU. 
Because of litigation over the constitutionality of the advertising, 
promotion, and solicitation provision in section 503A of the FD&C 
Act,\1\ the draft standard MOU was not completed. In 2013, section 503A 
of the FD&C Act was amended by the Drug Quality and Security Act (DQSA) 
(Pub. L. 113-54) to remove the advertising, promotion, and solicitation 
provisions that were held unconstitutional, and FDA took steps to 
implement section 503A, including the provisions on the MOU. In the 
Federal Register of February 19, 2015 (80 FR 8874), FDA withdrew the 
1999 draft standard MOU and issued the 2015 draft standard MOU for 
public comment. FDA received more than 3,000 comments on the 2015 draft 
standard MOU. By this notice, FDA is withdrawing the 2015 draft 
standard MOU, and the revised draft standard MOU made available today 
supersedes the 2015 draft standard MOU.
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    \1\ The conditions of section 503A of the FD&C Act originally 
included restrictions on the advertising or promotion of the 
compounding of any particular drug, class of drug, or type of drug 
and the solicitation of prescriptions for compounded drugs. These 
provisions were challenged in court and held unconstitutional by the 
U.S. Supreme Court in 2002. See Thompson v. Western States Med. 
Ctr., 535 U.S. 357 (2002).
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III. 503A Guidance

    Immediately after the enactment of the DQSA, in December 2013, the 
Agency published a draft guidance on section 503A of the FD&C Act 
entitled ``Pharmacy Compounding of Human Drug Products Under Section 
503A of the Federal Food, Drug, and Cosmetic Act'' (2013 draft 503A 
guidance) (see 78 FR 72901, December 4, 2013) announcing the 
availability of the draft guidance). The 2013 draft 503A guidance 
described FDA's proposed policy with regard to specific provisions of 
section 503A of the FD&C Act that require rulemaking or other action by 
FDA, such as the MOU provisions. Several commenters on the 2013 draft 
503A guidance offered FDA their views on the MOU provisions of section 
503A of the FD&C Act. FDA considered these comments in developing the 
2015 draft standard MOU and the revised draft standard MOU it is 
issuing today. The final 503A guidance (available at https://www.fda.gov/ucm/groups/fdagov-public/@fdagov-drugs-gen/documents/document/ucm469119.pdf), published July 2, 2014 (see 79 FR 37742 
announcing the availability of the final 503A guidance), states that 
FDA does not intend to enforce the 5 percent limit on distribution of 
compounded drug products out of the State in which they are compounded 
until after FDA has finalized an MOU and made it available to the 
States for their consideration and signature. After considering any 
comments on the revised draft standard MOU submitted to this docket, 
FDA intends to finalize the MOU and make it available for signature by 
individual States. FDA will determine at the time of publication of the 
final MOU how long it will allow States to consider whether to sign the 
MOU before FDA begins to enforce the 5 percent limit in those States 
that have not signed an MOU. As discussed below, FDA is proposing a 
180-day period.

IV. Revised Draft Standard MOU

    FDA has now developed a revised draft standard MOU on which it is 
soliciting public comment. FDA has consulted with NABP in developing 
this revised draft standard MOU. FDA also considered the comments 
submitted on the 2015 draft standard MOU, as well as comments on the 
MOU provisions it received in connection with the 2013 draft 503A 
guidance. Below, FDA has summarized and discussed key provisions of the 
revised draft standard MOU and, where appropriate, summarized changes 
that the Agency made in the revised draft standard MOU. Drug products 
intended for veterinary use, repackaged drug products, biological 
products subject to licensure through a biologics license application 
under section 351 of the Public Health Service Act (42 U.S.C. 262), and 
drug products compounded by outsourcing facilities are not the subject 
of the revised draft standard MOU.

A. Investigation of Complaints

    The revised draft standard MOU provides that States that enter into 
the MOU will agree to:
     Investigate complaints relating to drug products 
compounded by a pharmacist in the State and distributed outside the 
State by a pharmacy, including complaints about adverse drug 
experiences or product quality issues to, among other things, take 
steps to assess whether there is a public health risk and whether such 
risk is adequately contained;
     Take action, in accordance with and as permitted by State 
law, to ensure that the relevant compounding pharmacy investigates the 
root cause of the problem and addresses any public health risk 
identified in relation to the complaint;
     Notify FDA as soon as possible, but no later than 3 
business days, after receiving any complaints relating to a drug 
product compounded by a pharmacist in the State and distributed outside 
the State involving a serious adverse drug experience or serious

[[Page 45633]]

product quality issue, and provide FDA with certain information about 
the complaint, including the following:
    [cir] Name and contact information of the complainant;
    [cir] Name and address of the pharmacy/physician that is the 
subject of the complaint;
    [cir] Description of the complaint, including a description of any 
compounded drug product that is the subject of the complaint; and
    [cir] State's initial assessment of the validity of the complaint 
relating to a compounded drug product distributed outside the State, if 
available;
     Subsequent to this notification, provide FDA with the 
results (description and date of any State actions) of its 
investigation;
     Notify the appropriate regulator of physician compounding 
within the State of any complaints about adverse drug experiences or 
product quality issues related to drug products compounded by a 
physician in the State and distributed outside the State; and
     Maintain records of the complaints it receives, the 
investigation of each complaint, and any response to or action taken as 
a result of a complaint, beginning when the State receives notice of 
the complaint. The revised draft standard MOU says that the State 
agrees to maintain these records for at least 3 years, beginning on the 
date of final action or the date of a decision that the complaint 
requires no action.
    The types of complaints of compounded drug products that should be 
investigated include any adverse drug experience and product quality 
issues. Even non-serious adverse drug experiences and product quality 
issues can be indicative of problems at a compounding facility that 
could result in product quality defects leading to serious adverse drug 
experiences if not corrected. For example, inflammation around the site 
of an injection can indicate drug product contamination from inadequate 
sterile practices at the compounding pharmacy. If the pharmacy has 
inadequate sterile practices, other more serious contamination could 
result in serious adverse events.
    The revised draft standard MOU does not include specific directions 
to the States relating to how to conduct their investigation of 
complaints. Rather, as recommended by comments submitted to FDA 
previously, the details of such investigations are left to the States' 
discretion. For example, a State may review an incoming complaint 
describing an adverse drug experience and determine that such a 
complaint does not warrant further investigation. In other cases, a 
State may determine that an incoming complaint contains insufficient 
information and investigate further to determine appropriate action.
    States signing the revised draft standard MOU would agree to notify 
FDA about certain complaints and provide FDA with certain information 
about the complaints so FDA could investigate the complaints itself, or 
take other appropriate action.\2\ FDA received comments that it was not 
feasible for States to notify FDA of certain complaints within a 72-
hour timeframe, as described in the 2015 draft standard MOU. Comments 
noted that gathering the information requested for submissions within 
just 72 hours might be difficult for States, particularly given that 
this period might overlap with a weekend or holiday. Some comments 
requested up to 7 days to provide the notification, but several others 
suggested that FDA revise the notification period to 3 business days. 
FDA has now revised the MOU to reflect the latter approach. The revise 
draft standard MOU provides that notification will occur as soon as 
possible, but no later than 3 business days after the State receives 
the complaint. This period will continue to facilitate early Federal/
State collaboration on serious adverse drug experiences and serious 
product quality issues that have the potential to affect patients in 
multiple States, while providing for notification in a time frame that 
is more feasible for the States. We note that FDA has staff on call 24 
hours a day to receive information in emergency situations.
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    \2\ FDA is currently considering whether to propose regulations 
or issue guidance documents to further its implementation of section 
503A(b)(3)(B) of the FD&C Act. Notice of any such action will be 
provided in the Federal Register.
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    Comments also expressed concern that certain provisions regarding 
complaint investigation that States entering into the MOU would agree 
to may require States to take action not permitted by State law and may 
imply that, after taking action, the State has made a legal 
determination that the complaint has been resolved. The revised draft 
standard MOU clarifies that the State should investigate and take 
action that the State considers to be appropriate with respect to the 
complaint in accordance with and as permitted by State law. FDA has 
also clarified that, by signing the MOU, the State agrees to assess the 
existence of a public health risk associated with the complaint and 
whether such risk is adequately contained rather than make definitive 
determinations of risk or confirm containment.

B. Inordinate Amounts

    The revised draft standard MOU provides that States that enter into 
the MOU will agree to:
     On an annual basis (at minimum), identify, using surveys, 
reviews of compounding records during inspections of compounding 
pharmacies, or other mechanisms available to the State, compounding 
pharmacies that distribute inordinate amounts of compounded drug 
products interstate by collecting information regarding the following:
    [cir] Total number of prescription orders for compounded drug 
products distributed or dispensed intrastate, and
    [cir] Total number of prescription orders for compounded drug 
products distributed interstate;
     If the State becomes aware of a physician who is 
distributing compounded drug products interstate, coordinate with the 
appropriate regulator of physician compounding within the State to 
determine, using surveys, reviews of records during inspections, or 
other mechanisms available to the State, whether the physician 
distributes inordinate amounts of compounded drug products interstate 
by collecting information regarding the following:
    [cir] Total number of prescription orders for compounded drug 
products distributed or dispensed intrastate, and
    [cir] Total number of prescription orders for compounded drug 
products distributed interstate;
     For pharmacies or physicians that have been identified as 
distributing inordinate amounts of compounded drug products interstate, 
collect information regarding the following:
    [cir] Total number of prescription orders for sterile compounded 
drugs distributed interstate;
    [cir] Number of States in which the compounding pharmacy or 
physician is licensed or into which the compounding pharmacy or 
physician distributes compounded drug products; and
    [cir] Whether the State inspected for and found during its most 
recent inspection that the compounding pharmacy or physician 
distributed compounded drug products without valid prescriptions for 
individually identified patients;
     Notify FDA if the State identifies any pharmacy or 
physician within its jurisdiction that has distributed inordinate 
amounts of compounded drug products interstate; and
     Provide FDA with the following information regarding 
pharmacies or physicians that distributed inordinate amounts of 
compounded drug products interstate:

[[Page 45634]]

    [cir] Name and address of the pharmacy/physician;
    [cir] Total number of prescription orders for compounded drug 
products distributed or dispensed intrastate;
    [cir] Total number of prescription orders for compounded drug 
products distributed interstate;
    [cir] Total number of prescription orders for sterile compounded 
drugs distributed interstate,
    [cir] Number of States in which the compounding pharmacy or 
physician is licensed or into which it distributes compounded drug 
products, and
    [cir] Whether the State inspected for and found during its most 
recent inspection that the compounding pharmacy or physician 
distributed compounded drug products without valid prescriptions for 
individually identified patients.
    In the revised draft standard MOU, a pharmacy or physician is 
considered to have distributed an inordinate amount of compounded drug 
products interstate if the number of prescription orders for compounded 
drug products distributed interstate during any calendar month is 
greater than 50 percent of the number of prescription orders for 
compounded drug products dispensed or distributed both intrastate and 
interstate by such pharmacy or physician during that calendar month. 
This concept would be called the 50 percent threshold.
    Section 503A of the FD&C Act reflects Congress' recognition that 
compounding may be appropriate when it is based on receiving a valid 
prescription or notation from a prescribing practitioner for an 
identified individual patient. However, drug products compounded under 
section 503A 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 section 503A 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, without adequate 
oversight. 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, 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 drug products outside of the 
State in which they are compounded 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 drug products interstate and provides for 
appropriate investigation by a State agency of complaints relating to 
drug products compounded in and distributed outside such State. 
Implementation of this provision involves FDA describing what 
inordinate amounts means and providing a mechanism for addressing 
interstate distribution of inordinate amounts of compounded drug 
products, as long as the States agree to appropriately investigate 
complaints relating to drug products compounded in and distributed out 
of the State.
    In the 2015 draft standard MOU, FDA proposed that distribution 
interstate up to a 30 percent limit would not be inordinate, and that 
States entering into the MOU would agree to take action regarding 
pharmacists, pharmacies, or physicians that distribute inordinate 
amounts of compounded drugs interstate. FDA received a number of 
comments indicating that certain pharmacies, such as pharmacies located 
near state borders and home infusion pharmacies, distribute more than 
30 percent of their compounded drugs to patients interstate because, 
for example, the patients are located in another nearby State, or 
because few pharmacies compound a particular drug to treat an uncommon 
condition for patients dispersed throughout the country. The comments 
noted that the proposed definition of inordinate amounts and the 
proposed provision in which States agree to take action could prevent 
such pharmacies from fulfilling patients' medical needs for the drugs 
that they supply. Other comments expressed concern about instances in 
which pharmacies are located near a State border and distribute 
compounded drugs to the other side of that border. FDA also received 
general comments questioning the Agency's basis for the 30 percent 
limit and indicating that it was too low. Some comments suggested that 
FDA increase the limit, including a suggestion to increase it to 50 
percent.
    The revised draft standard MOU addresses these comments in two 
respects. First, it would remove the provision in the 2015 draft 
standard MOU that States agree to take action with respect to the 
distribution of inordinate amounts of compounded drug products 
interstate. Second, it would change what is considered ``inordinate 
amounts'' from a 30 percent limit to a 50 percent threshold.
    With respect to State action, the revised draft standard MOU 
instead provides that States entering into the MOU would agree to 
inform FDA of compounders that have distributed an inordinate amount of 
compounded drug products interstate. The Agency does not intend to take 
action against a compounder located in a State that has entered into 
the MOU solely because the compounder has exceeded the threshold for 
inordinate amounts. Rather, FDA proposes that States collect further 
information on compounders that have distributed inordinate amounts 
interstate and provide this information to FDA to help inform 
inspectional priorities.
    States generally have day-to-day oversight responsibilities over 
State-licensed pharmacies, pharmacists, and physicians. In general, FDA 
considers a pharmacy or physician that distributes the majority of its 
compounded drugs intrastate to be primarily overseen by the State, 
which is responsible both for regulation of the compounder and 
protection of its citizens who receive the compounded drugs. However, 
as discussed above, if a substantial proportion of a compounder's drugs 
is distributed outside a State's borders, adequate regulation of those 
drugs poses significant challenges to State regulators. In such cases, 
although State oversight continues to be critical, additional oversight 
by FDA may afford an important public health benefit.
    As stated above, in the revised draft standard MOU, FDA proposes 
eliminating the 30 percent limit and instead establishing 50 percent as 
the threshold beyond which the amount of compounded drugs distributed

[[Page 45635]]

interstate would be considered inordinate. Under this proposal, the 
threshold triggers an information collection and reporting obligation 
once it is reached. The Agency believes that more than 50 percent is an 
appropriate measure of ``inordinate amounts'' because it marks the 
point at which pharmacies and physicians are distributing the majority 
of their compounded drug products interstate, and the regulatory 
challenges associated with interstate distributors discussed above 
become more pronounced. At this tipping point, the risk posed by the 
distribution practices of the compounder may weigh in favor of 
additional Federal oversight in addition to State oversight.
    FDA recognizes that in some cases, compounders may distribute more 
than 50 percent of a small quantity of compounded drug products to 
contiguous States. Although such compounders have exceeded the 
inordinate amounts threshold proposed in the revised draft standard 
MOU, FDA would consider other information, such as the number of 
patients that will receive the compounded drugs, if available, when 
assessing the compounders' priority for risk-based inspection. 
Accordingly, when a State identifies a pharmacy or physician that 
distributes an inordinate amount of compounded drug products 
interstate, the draft standard MOU provides that the State would supply 
the Agency with: (1) Information about the total number of prescription 
orders for compounded drug products that it distributed or dispensed 
intrastate; (2) the total number of prescription orders for compounded 
drug products that it distributed interstate; (3) the total number of 
prescription orders for sterile compounded drug products that it 
distributed interstate; (4) the number of States in which the 
compounder is licensed; and (5) whether the State inspected for and 
found during its most recent inspection that the compounding pharmacy 
or physician distributed compounded drug products without valid 
prescriptions for individually identified patients. FDA intends to use 
this information to prioritize its inspections of compounders based on 
risk, focusing on those that appear likely to distribute large volumes 
of compounded drug products, particularly when the distribution is to 
multiple States, the drug products are intended to be sterile, and 
there is information about a lack of valid prescriptions for 
individually identified patients.
    FDA has further revised the calculation of inordinate amounts as 
follows. The 2015 draft standard MOU provided that a compounder is 
considered to have distributed an inordinate amount of compounded drug 
products interstate if the number of units of compounded 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 compounder during that calendar month. FDA received comments 
noting that because the calculation includes both compounded and non-
compounded drug products, in many cases, a substantial factor in 
whether a compounder has distributed an inordinate amount of compounded 
drug products interstate is whether the compounder offers non-
compounded drug products. For example, under that policy, many 
specialty compounding pharmacies that engage in interstate distribution 
and only distribute compounded drug products would be able to 
distribute fewer compounded drug products interstate before reaching an 
inordinate amount than a pharmacy that also fills prescriptions for 
non-compounded drug products, even if both pharmacies produced the same 
amount of compounded drug products. After considering the public 
comments, FDA does not believe that including non-compounded drug 
products within the calculation of inordinate amounts would help 
address the public health concerns associated with sending compounded 
drug products out of State that Congress sought to address in section 
503A(b)(3)(B) of the FD&C Act. Accordingly, for purposes of the revised 
draft standard MOU, FDA is proposing to exclude consideration of non-
compounded drug products from the calculation of inordinate amounts so 
that the denominator is determined by solely referencing compounded 
drug products.\3\
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    \3\ FDA also intends to exclude non-compounded drugs from the 
calculation of the 5 percent limit in section 503A(b)(3)(B)(ii).
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C. Definitions

    Appendix A in the revised draft standard MOU defines key terms used 
in the MOU. FDA is retaining the definitions of ``adverse drug 
experience,'' ``serious adverse drug experience,'' ``product quality 
issue,'' and ``serious product quality issue'' from the 2015 draft 
standard MOU.
    The revised draft standard MOU also defines ``distribution.'' With 
respect to that definition, for purposes of the revised draft standard 
MOU, FDA proposes that distribution means that a compounder has sent a 
compounded drug product out of the facility in which the drug was 
compounded. Such distribution may include, but is not limited to, 
delivery or shipment to a physician's office, hospital, or other health 
care setting for administration, and dispensing the drug product by 
sending it to a patient for the patient's own use. This definition is 
revised from the 2015 draft standard MOU and is intended to address 
stakeholder comments and to better effectuate the purposes of section 
503A of the FD&C Act.
    In the 2015 draft standard MOU, FDA proposed to define the term 
``distribution'' to include, among other things, dispensing of a 
compounded drug product to a patient for the patient's own use. We 
received a number of comments on the 2015 draft standard MOU stating 
that distributing and dispensing are mutually exclusive activities, 
such that if a drug product is distributed, it is not also dispensed, 
and vice versa. Some comments asserted, in particular, that a 
compounded drug product should not be considered to be ``distributed'' 
when it is provided pursuant to a prescription. Other stakeholders, 
however, agreed with the inclusion of drug products provided pursuant 
to a prescription within the definition of ``distribution'' and 
maintained that this interpretation was important to protect the public 
health.
    After considering these comments and the public health objectives 
of section 503A(b)(3)(B) of the FD&C Act, we have proposed to revise 
the definition of distribution to exclude dispensing that occurs at the 
facility in which the drug was compounded. We intend to consider that 
when a drug is picked up in this way, dispensing, but not distribution, 
occurs for purposes of calculating ``inordinate amounts'' under the MOU 
or applying the 5 percent limit in section 503A(b)(3)(B)(ii) of the 
FD&C Act.
    FDA proposes that in-person dispensing, where the transaction 
between the compounder and the patient is completed without the 
compounded drug leaving the facility in which it was compounded, is 
appropriately overseen, primarily, by the State outside the context of 
the MOU, regardless of whether the compounded drug product subsequently 
leaves the State. Such an intrastate, local transaction generally 
indicates a close connection among the patient, compounder, and 
prescriber. By contrast, transactions by mail often have a less direct 
nexus among the patient, compounder, and prescriber than in-

[[Page 45636]]

person pickups and would be considered ``distributions.''
    Under this revised proposed definition, drugs dispensed in-person 
that are later taken out of State would not contribute to reaching the 
threshold for inordinate amounts that would need to be reported to FDA 
under the MOU. Nor would complaints associated with compounded drug 
products dispensed this way and subsequently taken out of State be 
subject to the complaint investigation provisions of the MOU. FDA 
expects that, in practice, the State in which the initial transaction 
occurred would handle such complaints. The State may, in its 
discretion, notify FDA of the complaint. We recognize that including 
in-person dispensing in the definition of ``distribution'' would result 
in complex tracking issues in instances when a patient subsequently 
crosses State lines. Under the proposed revised definition, the 
compounder would not need to track where the patient takes the 
compounded drug product after it is in the patient's possession.
    FDA is not persuaded by comments on the 2015 draft standard MOU 
urging the Agency to interpret ``distribution'' and ``dispensing'' to 
be entirely separate activities for purposes of section 503A(b)(3)(B) 
of the FD&C Act. These comments recommend using definitions for these 
terms used elsewhere in the FD&C Act and FDA regulations, and generally 
conclude that distribution does not include the transfer of a drug 
pursuant to a prescription.
    The conditions in section 503A, including section 503A(b)(3)(B), 
must be interpreted consistent with the prescription requirement in 
section 503A(a) of the FD&C Act. If we were to interpret the word 
``distribution'' to apply only if a drug is provided without a 
prescription, it would mean that drug products compounded under section 
503A of the FD&C Act are excluded from regulation under the MOU and the 
5 percent limit, because to qualify for the exemptions under section 
503A, a compounder must obtain a valid prescription order for an 
individually identified patient. For the reasons stated previously in 
section IV.B, we believe this would achieve the opposite of what 
Congress intended. A compounded drug product may be eligible for the 
exemptions under section 503A of the FD&C Act only if it is, among 
other things, ``compounded for an identified individual patient based 
on the receipt of a valid prescription order or a notation, approved by 
the prescribing practitioner, on the prescription order that a 
compounded product is necessary for the identified patient.''
    Nor is there anything to suggest that Congress understood 
distributed and dispensed to be mutually exclusive categories rather 
than overlapping categories for purposes of section 503A of the FD&C 
Act. Section 503A(b)(3)(B) of the FD&C Act does not define 
``distribution'' to exclude dispensing, which Congress has done 
elsewhere when that was its intention.\4\ The definition proposed by 
comments would write an exclusion for dispensing, in its entirety, into 
the statute where Congress did not. Indeed, with respect to comments 
suggesting that drugs dispensed pursuant to prescriptions could not 
also be ``distributed,'' we note that, in section 503A(b)(3)(B) of the 
FD&C Act, Congress specifically contemplated that prescription orders 
could be ``distributed'' when it directed the Agency to count the 
number of prescription orders that pharmacists and prescribers 
distributed.
---------------------------------------------------------------------------

    \4\ In other (non-compounding) contexts, where it would further 
a regulatory purpose, Congress and the Agency have specifically 
defined ``distribute'' to exclude dispensing. See, for example, 
section 581(5) of the FD&C Act (21 U.S.C. 360eee(5)), which applies 
to Title II of the DQSA, and 21 CFR 208.3. Section 503A of the FD&C 
Act does not contain a similar definition or a similar specific 
direction to exclude dispensing from the meaning of distribution. We 
also note that these definitions were adopted for provisions that 
focus on conventionally manufactured drug products, which assign 
different obligations to dispensers than to wholesalers, packagers, 
or other intermediaries in light of the different role that 
dispensers play with respect to product labeling and the drug 
distribution chain. In contrast, section 503A of the FD&C Act 
focuses on compounded drugs, and the reasons for defining 
``distribution'' to exclude dispensing in Title II of the DQSA or 
part 208 do not apply.
---------------------------------------------------------------------------

V. Other Issues

A. Development of a Standard MOU

    A number of comments on the 1999 draft standard MOU, the 2013 draft 
503A guidance, and the 2015 draft standard MOU suggested that FDA 
negotiate MOUs with individual States, rather than develop a standard 
MOU. Section 503A of the FD&C Act requires the Agency to develop a 
standard MOU for use by the States. Furthermore, it would be 
impractical to develop an individualized MOU with every State, and 
creating individualized MOUs would create a patchwork of regulation of 
interstate distribution by compounders seeking to qualify for the 
exemptions under section 503A of the FD&C Act. This would be confusing 
to the health care community, as well as regulators.

B. Exemptions From the Interstate Distribution Provisions

    Some comments on the 2013 draft 503A guidance and the 2015 draft 
standard MOU requested that we consider exempting certain drug products 
or types of compounding entities from the threshold in the MOU and the 
5 percent limit. For example, some comments recommended that we exempt 
nonsterile products.
    American consumers rely on the FDA drug approval process to ensure 
that medications have been evaluated for safety and effectiveness 
before they are marketed in the United States. Drugs made by 
compounders, including those made at outsourcing facilities, are not 
FDA-approved. This means that they have not undergone premarket review 
of safety, effectiveness, or manufacturing quality. Therefore, when an 
FDA-approved drug is commercially available, FDA recommends that 
practitioners prescribe the FDA-approved drug rather than a compounded 
drug unless the prescribing practitioner has determined that a 
compounded product is necessary for the particular patient and would 
provide a significant difference for the patient as compared to the 
FDA-approved commercially available drug product.
    In section 503A of the FD&C Act, Congress enacted several 
conditions to differentiate compounders from conventional manufacturers 
and provided that only if the compounders meet those conditions can 
they qualify for the exemptions from the drug approval requirements in 
section 505 of the FD&C Act. One of those conditions relates to 
limitations on the interstate distribution of compounded drug products, 
and FDA intends to enforce those provisions to differentiate 
compounding that qualifies for the exemptions from conventional 
manufacturing in the guise of compounding that does not, and will apply 
the conditions to all types of drugs and all categories of compounding.

C. Information Sharing Between States and FDA

    The revised draft standard MOU provides that States will agree to 
notify FDA of any complaint relating to a compounded drug product 
distributed outside the State involving a serious adverse drug 
experience or serious product quality issue, and provide information 
about those events and issues. The revised draft standard MOU also 
provides that States will notify FDA if they identify a pharmacy or 
physician

[[Page 45637]]

within their jurisdiction that has distributed inordinate amounts of 
compounded drug products interstate.
    FDA regularly posts on its compounding website information about 
enforcement and other actions related to compounders that violate the 
FD&C Act, and it is obligated to share certain information with States 
under section 105 of the DQSA. In addition to these measures, FDA is 
taking steps to proactively share information with States about 
complaints that it receives, consistent with Federal laws governing 
information disclosure.

D. Enforcement of the 5 Percent Limit on Distribution of Compounded 
Drug Products Out of the State in Which They Are Compounded

    In the 503A guidance, FDA stated that it does not intend to enforce 
the 5 percent limit on distribution of compounded drug products outside 
of the State in which they are compounded until 90 days after FDA has 
finalized a standard MOU and made it available to the States for their 
consideration and signature. Most comments on the 2013 draft 503A 
guidance said this period was too short, but did not recommend a 
specific alternative. A few comments recommended a different timeframe, 
one recommending 120 days and another recommending 365 days. The 1997 
Senate Committee Report for the Food and Drug Administration 
Modernization Act suggests that a 180-day period for States to decide 
whether to sign might be appropriate.\5\ Consistent with the 2015 draft 
standard MOU, the Agency proposes a 180-day period after the final 
standard MOU is made available for signature before FDA will enforce 
the 5 percent limit in States that have not signed the MOU, and invites 
public comment on whether this is an appropriate timeframe. FDA will 
announce at the time it publishes the final standard MOU and makes it 
available for signature when it intends to begin enforcing the 5 
percent limit in States that do not sign.
---------------------------------------------------------------------------

    \5\ ``[U]ntil the State . . . enters into a memorandum of 
understanding (MOU) with the Secretary or 180 days after the 
development of the standard MOU, whichever comes first, the [section 
503A] exemption shall not apply if inordinate quantities of 
compounded products are distributed outside of the State in which 
the compounding pharmacy or physician is located.'' (U.S. Senate 
Committee Report)
---------------------------------------------------------------------------

E. Physician Compounding

    Several comments advised that State boards of pharmacy do not 
oversee physician compounding and would not be able to agree to perform 
the obligations under the 2015 draft standard MOU with respect to 
oversight of physician compounding.
    FDA recognizes that physicians often do not indicate, as part of 
their State licensure, that they compound drug products, and that there 
may not be routine mechanisms, such as inspections, to determine the 
extent to which such physicians distribute compounded drugs interstate. 
It is also FDA's understanding that physicians who compound drugs 
generally do so for their own patients, within their own professional 
practice, and they distribute or dispense them intrastate. However, 
there is still the potential for widespread harm if physicians ship 
large percentages of compounded drugs interstate without State 
investigation of complaints associated with those compounded drugs. 
Accordingly, under the revised draft standard MOU, States would agree 
to: (1) Notify FDA and the appropriate State agency if they receive 
information about serious adverse drug experiences or serious product 
quality issues associated with drugs compounded by physicians and (2) 
if they become aware of a physician distributing compounded drugs 
interstate, coordinate with the regulator of physician compounding 
within the State to determine whether the physician distributes 
inordinate amounts of compounded drug products interstate and notify 
FDA of physicians that do so.

F. Prescription Orders

    Commenters expressed that the meaning of the term ``units,'' which 
is used in the 2015 draft standard MOU to calculate the 30 percent 
limit, was unclear to them.
    In the revised draft standard MOU, FDA has replaced the term 
``unit'' with ``prescription order'' (i.e., the inordinate amounts 
calculation uses numbers of prescription orders for compounded drug 
products). ``Prescription orders'' includes chart orders for patients 
made in a healthcare setting. For purposes of this MOU, each refill is 
considered to be a new prescription order.

VI. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 
3501-3520), Federal Agencies must obtain approval from the Office of 
Management and Budget (OMB) for each collection of information they 
conduct or sponsor. ``Collection of information'' is defined in 44 
U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or 
requirements that members of the public submit reports, keep records, 
or provide information to a third party. Section 3506(c)(2)(A) of the 
PRA (44 U.S.C. 3506(c)(2)(A)), requires Federal Agencies to provide a 
60-day notice in the Federal Register for each proposed collection of 
information before submitting the collection to OMB for approval. To 
comply with this requirement, FDA is publishing notice of the proposed 
collection of information set forth in this document.
    With respect to the following collection of information, FDA 
invites comments on these topics: (1) Whether the proposed collection 
of information is necessary for the proper performance of FDA's 
functions, including whether the information will have practical 
utility; (2) the accuracy of FDA's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information collected; and (4) ways to 
minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques, when 
appropriate, and other forms of information technology.
    Section 503A of the FD&C Act describes, among other things, the 
circumstances under which certain drug products compounded by a 
licensed pharmacist or licensed physician are exempt from certain 
sections of the FD&C Act. One of the conditions to qualify for the 
exemptions listed in section 503A of the FD&C Act is that: (1) The drug 
product is compounded in a State that 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 a State or (2) if the drug product is 
compounded in a State that has not entered into such an MOU, the 
licensed pharmacist, pharmacy, or physician does not distribute, or 
cause to be distributed, compounded drug products out of the State in 
which they are compounded, more than 5 percent of the total 
prescription orders dispensed or distributed by such pharmacy or 
physician (see section 503A(b)(3)(B)(i) and (ii).
    Section 503A(b)(3) directs FDA, in consultation with the NABP, to 
develop a standard MOU for use by States in complying with the 
provisions concerning the interstate distribution of inordinate amounts 
of compounded drug products interstate and appropriate investigation by 
a State agency of complaints relating to drug products compounded in 
the State and distributed outside such State.

[[Page 45638]]

    The revised draft standard MOU contains the information collections 
that must be approved by OMB under the PRA. These information 
collections are described in this section of the document. For purposes 
of this analysis, FDA assumes that 45 States will sign the standard MOU 
with FDA.
    Under section III.a. of the revised draft standard MOU, the State 
will notify FDA by email at [email protected] as soon as possible, 
but no later than 3 business days, after receiving any complaint 
relating to a compounded drug product distributed outside the State 
involving a serious adverse drug experience or serious product quality 
issue. The notification will include the following information: (1) The 
name and contact information of the complainant; (2) the name and 
address of the pharmacy or physician that is the subject of the 
complaint; (3) a description of the complaint, including a description 
of any compounded drug product that is the subject of the complaint; 
and (4) the State's initial assessment of the validity of the complaint 
relating to a compounded drug product distributed outside the State, if 
available. In addition, the States will maintain records of the 
complaints they receive, the investigation of each complaint, and any 
response to or action taken as a result of a complaint, beginning when 
the State receives notice of the complaint. The States will maintain 
these records for at least 3 years, beginning on the date of final 
action or the date of a decision that the complaint requires no action.
    Based on our knowledge of State regulation of compounding practices 
and related complaints, we estimate that annually a total of 
approximately 45 States (``no. of respondents'' in table 1, row 2) will 
notify FDA within 3 business days of receiving any complaint relating 
to a compounded drug product distributed outside the State involving a 
serious adverse drug experience or serious product quality issue. We 
estimate that each State will notify FDA annually of approximately 3 
complaints it receives (``no. of responses per respondent'' in table 1, 
row 2), for a total of 135 notifications of complaints sent to FDA 
(``total annual responses'' in table 1, row 2). We estimate that 
preparing and submitting this information to us as described in the MOU 
will take approximately 0.5 hours per response (``average burden per 
response'' in table 1, row 1), for a total of 67.5 hours (``total 
hours'' in table 1, row 2).
    We also estimate that a total of approximately 45 States (``no. of 
recordkeepers'' in table 2) will prepare and maintain records for 3 
years of the complaints they receive, investigations of complaints, and 
any State action taken or response to complaints. We estimate that each 
State will receive approximately 3 complaints annually and will prepare 
and maintain approximately 5 records per each complaint the State 
receives, for a total of 15 records per State (``no. of records per 
recordkeeper'' in table 2), and a total of 675 records annually across 
all States (``total annual records'' in table 2). We further estimate 
that preparing and maintaining these records will take approximately 1 
hour per record (``average burden per recordkeeping (in hours)'' in 
table 2), for a total of 675 hours (``total hours'' in table 2).
    Under section III.b of the revised draft standard MOU, on an annual 
basis (at minimum), the State will identify, using surveys, reviews of 
records during inspections, or other mechanisms available to the State, 
compounding pharmacies that distribute inordinate amounts of compounded 
drug products interstate by collecting information regarding the total 
number of prescription orders for compounded drug products distributed 
or dispensed intrastate and the total number of prescription orders for 
compounded drug products distributed interstate. Similarly, the State 
will engage in the same efforts to collect this information if it 
becomes aware of a physician who is distributing compounded drug 
products interstate. If a pharmacy or physician has been identified as 
distributing inordinate amounts of compounded drug products interstate, 
the State will also collect information regarding: (1) The total number 
of prescription orders for sterile compounded drug products distributed 
out of State; (2) the number of States in which the compounding 
pharmacy or physician is licensed or number of States into which the 
compounding pharmacy or physician distributes compounded drug products; 
and (3) whether the State inspected for and found during its most 
recent inspection that the compounding pharmacy or physician 
distributed compounded drug products without valid prescriptions for 
individually identified patients.
    The States will notify FDA by email at [email protected] within 
30 days of identifying a pharmacy/physician within their jurisdiction 
that has distributed inordinate amounts of compounded drug products 
interstate, as described in the revised draft standard MOU. The 
notification should include the name and address of the pharmacy/
physician and the information that the States collected, described in 
the previous paragraph.
    We estimate that annually a total of approximately 45 States (``no. 
of respondents'' in table 1, row 3) will identify compounding 
pharmacies or physicians that distribute inordinate amounts of 
compounded drug products interstate. We estimate that each State will 
perform surveys or inspections of 150 pharmacies or physicians to 
identify this information (``no. of responses per respondent'' in table 
1, row 3). We estimate that this will take approximately 1 hour per 
response (``average burden per response'' in table 1, row 3), for a 
total of 6,750 hours (``total hours'' in table 1, row 3). We estimate 
that annually a total of 40 States (``no. of respondents'' in table 1, 
row 4) will notify FDA of their finding that a pharmacy or physician 
has distributed inordinate amounts of compounded drug products 
interstate. We estimate that each State will notify FDA annually of 
approximately 50 findings it makes (``no. of responses per respondent'' 
in table 1, row 4), for a total of 200 notifications (``total annual 
responses'' in table 1, row 4). We estimate that preparing and 
submitting this information to FDA as described in the MOU will take 
approximately 0.5 hours per response (``average burden per response'' 
in table 1, row 4), for a total of 100 hours (``total hours'' in table 
1, row 4).
    Under section V of the revised draft standard MOU, a State may 
designate a new liaison to the MOU by notifying FDA's administrative 
liaison in writing. If a State's liaison becomes unavailable to fulfill 
its functions under the MOU, the State will name a new liaison within 2 
weeks and notify FDA.
    We estimate that annually a total of approximately 13 States (``no. 
of respondents'' in table 1, row 5) will notify FDA of a new liaison to 
the MOU. We estimate that each State will submit to FDA annually 
approximately 1 notification of a new liaison (``no. of responses per 
respondent'' in table 1, row 5), for a total of 13 notifications of a 
new liaison (``total annual responses'' in table 1, row 5). We estimate 
that preparing and submitting each notification as described in the MOU 
will take approximately 0.2 hours per response (``average burden per 
response'' in table 1, row 5), for a total of 2.6 hours (``total 
hours'' in table 1, row 5).
    Under section VI of the revised draft standard MOU, a State may 
terminate its participation in the MOU by submitting to FDA a 30-day 
notice of termination.
    We estimate that annually a total of approximately 1 State (``no. 
of

[[Page 45639]]

respondents'' in table 1, row 6) will notify FDA that it intends to 
terminate its participation in the MOU. We estimate that this State 
will submit to FDA annually approximately 1 notification of termination 
(``no. of responses per respondent'' in table 1, row 6), for a total of 
1 notification (``total annual responses'' in table 1, row 6). We 
estimate that preparing and submitting the notification as described in 
the MOU will take approximately 0.2 hours per notification (``average 
burden per response'' in table 1, row 6), for a total of 0.2 hours 
(``total hours'' in table 1, row 6).
    Under section VI of the revised draft standard MOU, if a State does 
not adhere to the provisions of the MOU, FDA may post a 30-day notice 
of termination on its website. As a result of this action by FDA, the 
State will notify all licensed pharmacists, pharmacies and physicians 
within the State of the termination and advise them that compounded 
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 such pharmacy or 
physician.
    We estimate that annually a total of approximately 1 State (``no. 
of respondents'' in table 3) will submit to the pharmacists, 
pharmacies, and physicians in its State 1 notification of termination 
as described in the MOU (``no. of disclosures per respondent'' in table 
3), for a total of 1 notification of termination (``total annual 
disclosures'' in table 3). We estimate that preparing and submitting 
each notification will take approximately 1 hour per notification 
(``average burden per disclosure (in hours)'' in table 3), for a total 
of 1 hour (``total hours'' in table 3).
    FDA estimates the burden of this collection of information as 
follows:

                                                     Table 1--Estimated Annual Reporting Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Number of
 Compounding MOU between FDA and States     Number of     responses per   Total annual             Average burden per response              Total hours
                                           respondents     respondent       responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
State notifies FDA of compounding                    45               3             135  0.5 (30 minutes)...............................            67.5
 complaints it receives.
State identifies pharmacies or                       45             150           6,750  1..............................................           6,750
 physicians that distribute inordinate
 amounts of compounded drugs interstate
 using surveys or inspections.
State notifies FDA of the distribution               40              50             200  0.5 (30 minutes)...............................             100
 of inordinate amounts of compounded
 drug products.
State notifies FDA of a new liaison to               13               1              13  0.2 (12 minutes)...............................             2.6
 the MOU.
State notifies FDA of its intent to                   1               1               1  0.2 (12 minutes)...............................             0.2
 terminate participation in the MOU.
                                        ----------------------------------------------------------------------------------------------------------------
    Total..............................  ..............  ..............  ..............  ...............................................         6,920.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.


                               Table 2--Estimated Annual Recordkeeping Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                                                  Average burden
 Compounding MOU between FDA and     Number of       Number of     Total annual         per
             States                recordkeepers    Records per       records      recordkeeping    Total hours
                                                   recordkeeper                     (in hours)
----------------------------------------------------------------------------------------------------------------
State recordkeeping for 3 years               45              15             675               1             675
 of compounding complaints......
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............  ..............             675
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.


                           Table 3--Estimated Annual Third-Party Disclosure Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                     Number of                    Average burden
 Compounding MOU between FDA and     Number of      disclosures    Total annual   per disclosure    Total hours
             States                 respondents   per respondent    disclosures     (in hours)
----------------------------------------------------------------------------------------------------------------
State notification to                          1               1               1               1               1
 pharmacists, pharmacies, and
 physicians that its
 participation in the MOU has
 been terminated by FDA.........
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............  ..............               1
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.


[[Page 45640]]

III. Electronic Access

    Persons with access to the internet may obtain the draft MOU at 
either http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm or 
https://www.regulations.gov.

    Dated: August 31, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-19461 Filed 9-7-18; 8:45 am]
 BILLING CODE 4164-01-P