FDA Expands State Collaboration Framework for 503A and 503B Compounding Oversight

For QA directors and regulatory leads at compounding facilities, FDA's evolving state collaboration framework carries direct inspection and enforcement implications. The agency's compounding program shares complaint data, adverse event reports, and inspection findings with state officials, and actively invites states to participate in facility inspections, creating a dual-layer oversight environment that 503A and 503B operations must account for in their compliance posture.

States retain primary responsibility for day-to-day oversight of the vast majority of U.S. compounders, most of which do not register with FDA. State officials are frequently the first to flag facilities operating beyond the scope of traditional compounding, functioning more like conventional manufacturers. Under Section 105 of the Drug Quality and Security Act (DQSA), state boards of pharmacy may submit concerns to FDA when a compounding pharmacy appears to be acting contrary to Section 503A of the FD&C Act; FDA is then required to notify other states upon receipt of those submissions or upon making a non-compliance determination.

Information-sharing between FDA and states is governed by formal agreements. Federal law restricts FDA from disclosing non-public data without an applicable agreement in place. The agency encourages states to execute either FDA Commissioning agreements or 21 CFR 20.88 agreements to enable lawful data exchange. Facilities operating across state lines should verify whether their home state has entered into either agreement, as the presence or absence of such arrangements affects how inspection findings and complaint data flow between regulators.

The standard Memorandum of Understanding (MOU), made available by FDA in October 2020 and developed in consultation with the National Association of Boards of Pharmacy (NABP), addresses interstate distribution of inordinate amounts of compounded drugs and out-of-state complaint investigations. Its implementation remains unresolved: following a legal challenge by compounding pharmacies in the U.S. District Court for the District of Columbia, the court remanded the MOU in September 2021, directing FDA to either certify no significant economic impact on small businesses or prepare a regulatory flexibility analysis. FDA has indicated it intends to pursue notice-and-comment rulemaking to address the statutory provisions on interstate compounded drug distribution, including the MOU framework.

Annual intergovernmental working meetings, most recently archived from November 2023, provide the structured venue through which federal and state regulators align on compounding oversight priorities and continuous improvement to the collaboration model.

The pending rulemaking on interstate distribution and MOU requirements represents the next measurable compliance checkpoint for 503A facilities distributing compounded products beyond their home state.

Source: FDA Drugs / Human Drug Compounding via FDA.gov, June 3, 2026.