Share this:


The MOU – what is it and what does it mean to Compounding Pharmacies? 

by Barbara A. Knightly, PharmD, RPh
Vice Chair of BPS Specialty Council on Compounded Sterile Preparations Pharamcy
EVP Pharmacy Regulatory Affairs & Quality Operations
Pentec Health



Many of you have heard the term MOU before but do you know what it is? Do you know how it may impact the compounding services you provide to your patients?


What is the MOU?

The MOU is a Memorandum of Understanding between the FDA and state boards of pharmacy related to 503a pharmacies and the distribution of compounded drugs to other states.  The FDA refers to 503a pharmacies as traditional compounding pharmacies that compound in accordance with patient specific prescriptions and are required by the state boards of pharmacy to comply with United States Pharmacopeia (USP) standards. The FDA has made the MOU available for States to sign effective 10/26/2020.  States have 1 year to sign the MOU before it becomes effective in October, 2021. This affects 503a pharmacies and medications dispensed across state lines.  States are currently reviewing the MOU to determine whether or not they will be able to sign it and enter into an agreement with the FDA.  Many states have signaled they have concerns with the document but understand the intentions of the MOU are to protect the public but also ensure access to vital medication.


By signing the MOU, States are agreeing to the following responsibilities:

  • On an annual basis, identify, using surveys, review of records during inspections, data submitted to an Information Sharing Network, pharmacies that dispense or distribute inordinate amounts (>50%) of compounded human products interstate.
  • Complaints and adverse drug experiences and product quality issues that are “serious” must be reported to the FDA within 5 days and an investigation be performed pursuant to established investigatory policies and procedures.
  • If the State becomes aware of a physician distributing any amount interstate or is informed of a complaint or adverse drug experience involving a medication compounded by a physician office, they must notify the appropriate regulator in the state and submit information to the FDA via Information Sharing Network.


What does it mean for my pharmacy?

The answer depends upon how many compounded prescriptions you dispense across state lines and whether your state board signs the MOU.

  • If your state chooses not to sign the MOU, your pharmacy is prohibited from dispensing more than 5% interstate.
  • If your state signs the MOU, you are not prohibited from interstate dispensing but in the event that you dispense more than 50% to patients in any other state other than where your pharmacy resides, your state board must provide this information to the FDA.


The FDA considers a pharmacy to be primarily overseen by the state board of pharmacy; however, if a substantial proportion of compounded prescriptions are distributed outside a state’s borders, adequate regulation poses challenges to state regulators according to the FDA.  In these situations, although state oversight continues to be critical, additional oversight by FDA may afford an important public health benefit.