US Pharm. 2021;46(11):8-12.

The FDA defines traditional pharmacy compounding as “the combining, mixing, or altering of ingredients to create a customized medication for an individual patient in response to a licensed practitioner’s prescription.”1 On the other hand, nontraditional pharmacy compounding or drug compounding within an outsourcing facility “may include (1) the production and shipping of large volume of drugs across state lines; (2) provision of compounded drugs without a prescription for an individual patient to receive a compounded version and outside of a professional relationship; and (3) production of products to third parties, such as hospitals, clinics, physician offices, and home health providers.”2 These are defined in Sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act), respectively.3

Traditional pharmacies cannot compound regularly or in inordinate amounts any drug products that are essentially copies of a commercially available drug product, whereas nontraditional pharmacies can only compound if the drug is not essentially a copy of one or more approved drug; an exception is made if the drug is currently in shortage.4

Comparing Compounded Drugs With FDA-Approved Drugs

There are significant differences between compounded drugs and FDA-approved drugs. For example, compounded drugs are not evaluated by the FDA for safety, effectiveness, and quality. Compounded drugs are not FDA approved, which means that there is a lack of review by the FDA to evaluate the safety, effectiveness, or quality of compounded medications before they reach patients.5

Traditional compounding pharmacies are exempt from federal Current Good Manufacturing Practice (CGMP) regulations, which are mandatory for all approved pharmaceutical manufacturers to follow. CGMPs assure proper design, monitoring, and control of pharmaceutical manufacturing processes and facilities.6 Products compounded under 503B are subject to CGMP.3 State boards of pharmacy oversee 503A facilities, whereas the FDA oversees 503B; if there is evidence of a drug-related problem, the FDA will intervene in 503A facilities.7

Labeling of compounded prescriptions is not regulated or standardized, unlike with FDA-approved prescription medications. Differences in the product labels of conventional manufacturers and compounders may lead to dosing errors because the FDA does not review the labels of compounded products prior to marketing. For small-volume, parenteral marketed prescription drugs and Center for Drug Evaluation and Research–regulated biological products, the FDA recommends that the strength per total volume be the primary and prominent expression on the label, followed by the strength per milliliters in parentheses. This avoids potential overdoses due to medication errors.

The FDA is aware of reports in which patients were inadvertently overdosed on fentanyl, ketamine, phenylephrine, neostigmine, and succinylcholine because the strength per milliliter was misconstrued to represent the total amount of drug in the compounded bag or syringe.8 Labeling requirements for 503A compounding pharmacies are laxer than those for 503B facilities.9

Pros of Compounding

There are numerous pros to the use of a compounded medication.10 Compounded medications allow for customized, flexible, and precise dosing and are necessary when an FDA-approved drug product is not available or appropriate or for which the usual strength or route of delivery must be altered.1

In addition, compounded medications are essential for patients who need a customized dose or who are allergic to a component (e.g., dye) in the commercially available FDA-approved version of the drug. They are also vital to the geriatric patient or a child who cannot swallow a pill and needs a medicine in a liquid form that is not readily available.4 Specialized dosage forms such as lollipops or effervescent drinks or the use of flavoring agents can help increase palatability and adherence. Medications can also be prepared for those on special diets, such as gluten-free, sugar-free, casein-free, vegetarian, vegan, or kosher diets.11

The most common compounded medications include drugs for pain management (gabapentin, baclofen, cyclobenzaprine, diclofenac, ketamine, lidocaine, bupivacaine, flurbiprofen) and hormone replacement (progesterone, estradiol, estriol, testosterone).12 Compounded medications are also commonly used in dermatology to help achieve better therapeutic effects through the tailored actions of a specific combination of ingredients.13

In addition, compounded medications provide a source of pharmaceuticals during times of national drug shortages. Drug shortages have created a tremendous strain on the ability to provide adequate care. In 2011, it was estimated that up to 11% of all FDA-approved and marketed drugs, vaccines, and biologics were in short supply.14 National drug shortages worsened during the COVID-19 pandemic as foreign countries that provided America’s drug supply limited the amount of medication that they would export to retain adequate supplies for their own citizens. This was exacerbated by manufacturing plant closures and limitations on transportation.15 Compounding pharmacies helped meet the pharmaceutical need during this critical time.16

Cons of Compounding

Serious patient illnesses and death have been linked to poor-quality compounding drugs.17 In 2012, New England Compounding Center (NECC) distributed compounded preservative-free methylprednisolone acetate solution that was contaminated with Exserohilum rostratum and Aspergillus fumigatus, resulting in 753 cases of fungal infections and 63 deaths.18 

This has not been the only incident. There is a database of compounding recalls, inspections, and other actions on the FDA’s website.19 Incidents have involved contamination resulting in infection or improper doses.1

In 2013, in response to the NECC tragedy, Congress amended the FD&C Act by enacting the Drug Quality and Security Act (DQSA). Part of DQSA is the Compounding Quality Act, which provides the FDA with more authority to regulate and monitor the manufacturing of compounded drugs.20 However, the FDA does not routinely inspect compounding pharmacies, nor do they determine the quality of compounded pharmaceuticals.9 Additionally, in the past the reporting of adverse drug events involving compounded medications had not been addressed. However, in 2015 the Adverse Event Reporting for Outsourcing Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic Act provided guidance to outsourcing compounding facilities on submitting adverse event reports to the FDA. State boards of pharmacy may require outsourcing facilities licensed in their state to report adverse drug events.21 Pharmacists can contribute to the safety of compounded pharmaceuticals by reporting adverse events to the FDA.22

Compounding issues may arise such as formulation failure or drug-dosing miscalculations. Issues with drug dissolution, poor drug formulation uniformity, and supratherapeutic or subtherapeutic dose-calculation errors have been reported with compounded medications.1-3,23 These compounding errors disproportionately affect children.24

Compounded medications are expensive and time-consuming to make and may require specialized equipment that can further add to their cost.1 The average ingredient cost for compounded medications increased from $308.49 to $710.36, which represented a 130.3% increase in cost from 2012 to 2013. This is in contrast to noncompounded prescriptions, which only increased by 7.7%.12

Lack of regulatory oversight and surveillance is also a con of compounding. There are state-to-state variations in regulations and oversight. Additionally, there are insufficient data collection and surveillance to identify safety signals, which can pose a public-health risk.9

On September 1, 2021, the United States Pharmacopoeia (USP) disseminated revisions to USP <795>, which pertains to nonsterile compounding of pharmaceuticals, and USP <797>, which refers to the compounding of sterile products.25 The revisions to USP <795> focused on expanding guidance for beyond-use-dates (BUDs) for compounded nonsterile preparations if stability information is not available, determining the role of water activity in assessing BUD limits, developing a table of commonly compounded dosage forms and their BUDs, and clarifying the requirements and procedures of a drug recall.

USP <797> changes focused on also expanding guidance on BUDs for sterile preparations and recalls, as well as providing recommendations for the use of nonpreserved ophthalmic preparation BUDs, redefining the microbial risk levels and sterility testing requirements, clarifying requirements for compounding allergy extracts, maintaining master formulation and compounding records, providing guidance on isolators, and removing information on hazardous drugs and radiopharmaceuticals.25


Compounded medications have an important role in helping to meet the specific pharmaceutical needs of patients. All of the concerns beforementioned have led the Pew Institute to call for greater transparency and regulation of the compounding pharmacy industry to improve safe access to these customized medications.7 There needs to be a balance between maintaining access to much-needed compounded drugs while minimizing the risks associated with their use. Open communication should be maintained with patients about the use of compounded products to help mitigate liability concerns. Pharmacists need to be knowledgeable about the advantages and disadvantages associated with the use of compounded medications.

For more information on pharmacy compounding, including the Compounding Quality Center of Excellence, compounding laws and policies, compounding oversight and compliance issues, outsourcing facilities, bulk-drug substances used in compounding, and  information for consumers, healthcare professionals, and states as well as compounding research, visit

The content contained in this article is for informational purposes only. The content is not intended to be a substitute for professional advice. Reliance on any information provided in this article is solely at your own risk.


1. Gudeman J, Jozwiakowski M, Chollet J, et al. Potential risks of pharmacy compounding. Drugs R&D. 2013;13(1):1-8.
2. Glassgold J. Compounded drugs. Congressional Research Service. June 3, 2013. Accessed September 27, 2021.
3. FDA. FD&C Act provisions that apply to human drug compounding. Accessed September 27, 2021.
4. U.S. Department of Health and Human Services/U.S. Food and Drug Administration/Center for Drug Evaluation and Research (CDER)/ Office of Compliance/OUDLC. Compounded drug products that are essentially copies of approved drug products under section 503B of the Federal Food, Drug, and Cosmetic Act–Guidance for Industry. Accessed September 27, 2021.
5. FDA. Compounding laws and policies. Accessed September 27, 2021.
6. FDA. Facts about current good manufacturing practices. Accessed September 27, 2021.
7. Pew Charitable Trusts. Market for compounded drugs needs greater transparency and regulatory certainty. Accessed September 27, 2021.
8. FDA. Differences in strength expression on product labels of compounders and conventional manufacturers may lead to dosing errors. Accessed September 27, 2021.
9. National Academies of Sciences, Engineering, and Medicine; Health and Medicine Division; Board on Health Sciences Policy; Committee on the Assessment of the Available Scientific Data Regarding the Safety and Effectiveness of Ingredients Used in Compounded Topical Pain Creams; Jackson LM, Schwinn DA, eds. Compounded Topical Pain Creams: Review of Select Ingredients for Safety, Effectiveness, and Use. Washington, DC: National Academies Press; 2020;4. Accessed September 27, 2021.
10. AlphaScrip Inc. Pros and cons of compounding medications. Accessed September 27, 2021.
11. Bell EA. The benefits and risks of compounding pharmacies. November 1, 2012. Accessed September 27, 2021.
12. McPherson T, Fontane P, Iyengar R, Henderson R. Utilization and costs of compounded medications for commercially insured patients, 2012-2013. J Manag Care Spec Pharm. 2016;22(2):172-181./
13. Todorova A, Gugleav V, Georgieva L. Doctors’ point of view of pharmacy compounding-advantages and disadvantages. IAIM. 2016;3(2): 45-50. Accessed September 27, 2021.
14. Le P, Seoane-Vazquez E, Rodriguez-Monuio R, et al. The prevalence of pharmaceutical shortages in the United States. J Generic Med. 2011;8:210-218.
15. Piatek OI, Ning JC, Touchette DR. National drug shortages worsen during COVID-19 crisis: proposal for a comprehensive model to monitor and address critical drug shortages. Am J Health Syst Pharm. 2020;77(21):1778-1785.
16. McLernon LM. Center for Infectious Disease Research and Policy. Drug compounding helped address drug gaps during COVID. Accessed September 27, 2021.
17. FDA. Compounding risk alerts. Accessed September 27, 2021
18. CDC. Multistate outbreak of fungal infection associated with injection of methylprednisolone acetate solution from a single compounding pharmacy–United States, 2012. MMWR Morb Mortal Wkly Rep. 2012;61(41):839-842. Accessed September 27, 2021.
19. FDA. Compounding: inspections, recalls, and other actions. Accessed September 27, 2021.
20. U.S. Food and Drug Administration. FDA’s Human Drug Compounding Progress Report: Three years after enactment of the Drug Quality and Security Act (January 2017). Accessed September 27, 2021.
21. National Association of Boards of Pharmacy. FDA issues guidance on adverse event reporting for outsourcing facilities. October 14, 2015. Accessed September 27, 2021.
22. Janusziewicz AN, Glueck SN, Park SY, et al. A pharmacist-driven Food and Drug Administration incident surveillance and response program for compounded drugs. Am J Health Syst Pharm. 2021;78(15):1438-1443.
23. Mohiuddin AK. Extemporaneous compounding: cautions, controversies and convenience. IP Int J Comprehensive Adv Pharmacol. 2018;3124-137. Accessed September 27, 2021.
24. Watson CJ, Whitledge JD, Siani AM, Burns MM. Pharmaceutical compounding: a history, regulatory overview, and systematic review of Compounding Errors. J Med Toxicol. 2021;17(2):197-217.
25. United States Pharmacopoeia. Proposed updates to USP general chapters <795> and <797>. Accessed September 27, 2021.

To comment on this article, contact