Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 21

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 21
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for a customer. In such cases, it is acceptable to engage in anticipatory compounding or the preparation of larger batches so that medications
will be ready when they are needed. Anticipatory compounding also reduces the cost of compounded medications, as economies of scale can
be realized by producing larger batches. Anticipatory compounding also leads to less wasted chemicals, dilutions, fillers, and other
associated products that are produced, and greater accuracy and uniformity in finished medications, as larger batches decrease the variation
caused by preparing multiple, smaller batches. Based on our history of meeting the needs of our customers, we are able to anticipatorily
compound batches of our formulations for our customers, per the applicable regulations.

Many of the states into which
we deliver pharmaceuticals have laws and regulations that require out-of-state pharmacies to register with, or be licensed by, the boards
of pharmacy or similar regulatory bodies in those states. These states generally permit the dispensing pharmacy to follow the laws of
the state within which the dispensing pharmacy is located. However, various state pharmacy boards have enacted laws and/or adopted rules
or regulations directed at restricting or prohibiting the operation of out-of-state pharmacies by, among other things, requiring compliance
with all laws of the states into which the out-of-state pharmacy dispenses medications, whether or not those laws conflict with the laws
of the state in which the pharmacy is located, or requiring the pharmacist-in-charge to be licensed in that state. To the extent that
such laws or regulations are found to be applicable to our operations, we believe we comply with them.

Further, under federal law, Section
503A of the FDCA previously had language that implied a limitation of the amount of compounded products that a pharmacy can distribute
interstate. The interpretation and enforcement of this provision is dependent on the FDA entering into a standard Memorandum of Understanding
(“MOU”) with each state setting forth limits on shipments of interstate compounding. In January of 2019, the FDA released
the “2018 Compounding Policy Priorities Plan” (the “2018 Compounding Plan”) which provided an overview of the
key priorities the FDA planned to focus on in 2018 in connection with compounding regulations. One of the priorities outlined in the
2018 Compounding Plan addressed the FDA’s plan to release a revised MOU (the “Revised MOU”). Pursuant to the statements
in the 2018 Compounding Plan, the Revised