Reed Smith Client Alerts

After receiving questions from industry stakeholders in light of compounding during the COVID-19 pandemic, the U. S. Food and Drug Administration’s (FDA’s) Center for Drug Evaluation and Research released several clarifications regarding its current compounding policies, which are set out in further detail below.
doctor conversation

FDA’s compounding policy clarifications included the following:

  • FDA’s memorandum of understanding (MOU) with the states remains in draft form. FDA stated that it does not intend to enforce the 5 percent limit on interstate distribution of compounding drug products for pharmacy compounders until after it has finalized the MOU and has given states the opportunity to sign it. The MOU will remain in draft form until then.
  • Compounded drugs that are essentially copies of commercially available drugs that are on the drug shortage list, discontinued, or no longer marketed as commercially available will not be deemed copies. FDA stated that it does not intend to consider compounded drugs produced by pharmacy compounders and by outsourcing facilities to be “essentially a copy” if the compounded drug is identical or nearly identical to an FDA-approved drug that (1) appears on FDA’s drug shortage list, (2) has been discontinued, or (3) is no longer marketed as commercially available.
  • FDA’s guidance on hospital and health system compounding remains in draft form. FDA’s draft guidance entitled, “Hospital and Health System Compounding Under the Federal Food, Drug, and Cosmetic Act,” (the Guidance) is still in draft form and FDA still plans to issue a revision. The Guidance sets out conditions under which FDA does not intend to take action against a hospital pharmacy that distributes compounded drug products without first receiving a patient-specific prescription.

In addition to the above, pharmacists are now playing an even greater role in the care of patients in light of COVID-19. On April 8, 2020, the Office of the Assistant Secretary for Health issued new guidance under the Public Readiness and Emergency Preparedness Act authorizing licensed pharmacists to order and administer COVID-19 tests that FDA has authorized. As emphasized by Health and Human Services (HHS) Secretary Alex Azar, pharmacists play a critical and vital role in providing patients with not only access to care, but also with important public health services and information, especially given that the vast majority of Americans live close to a pharmacy. The guidance issued by HHS also shields pharmacists from liability that comes from administering COVID-19 tests to patients, subject to certain exceptions.

Our Reed Smith Coronavirus team includes multidisciplinary lawyers from Asia, EME and the United States who stand ready to advise you on the issues above or others you may face related to COVID-19.

For more information on the legal and business implications of COVID-19, visit the Reed Smith Coronavirus (COVID-19) Resource Center or contact us at

Client Alert 2020-232