FDA to Analyze Economic Effect of Agreement with States on Small Businesses FDA is informing compounders, states, and other stakeholders, that the agency intends to engage in notice-and-comment rulemaking related to statutory provisions regarding certain distributions of compounded human drugs and a standard memorandum of understanding (MOU) between FDA and states. The MOU is an agreement intended to address interstate distribution of inordinate amounts of compounded drugs and complaint investigation by a state regulator relating to compounded drugs distributed outside the state. In October 2020, FDA was sued in the U.S. District Court for the District of Columbia regarding the MOU, and the Court remanded (returned) the MOU to FDA to either certify that it will not have a significant economic effect on small businesses or prepare a regulatory flexibility analysis. The agency intends to engage in notice-and-comment rulemaking to fully undertake this analysis and ensure a robust framework for these important public health protections regarding certain distributions of compounded human drugs. FDA intends to update the MOU based on the content of a final rule and announce a new opportunity for all states to consider and sign the MOU. The agency considers the MOU published in October 2020 to be suspended for the duration of the rulemaking process. This means that, during the rulemaking process, the agency will not enter into new agreements with states based on this MOU. FDA does not expect states that have signed the MOU to carry out the activities described in the MOU. FDA does not intend to enforce the statutory 5 percent limit on the distribution of compounded drugs out of the state in which they are compounded by compounders located in states that do not sign the MOU for the duration of the rulemaking process. FDA plans to provide updates, as appropriate, on the rulemaking and MOU. The MOU was developed in consultation with the National Association of Boards of Pharmacy as described in section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and was the product of more than 20 years of collaborative dialogue and stakeholder input. The MOU is a key public health protection in the law and is anticipated to help enhance communication and maximize federal and state resources for oversight of compounded drugs produced by traditional pharmacies. FDA is committed to implementing these important public health protections. | 
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