Pharmacy Compounding: Is there any oversight?


Pharmacy compounding involves the preparation of customized medications that are not commercially available for individual patients with specialized medical needs.

Traditional pharmacy compounding involves the act of combining, mixing, or altering ingredients to prepare a customized medication for an individual patient upon receipt of a valid prescription for the compounded product.

Driven by medical needs, cost issues, physician preferences, and in some cases drug shortages, the compounding industry has evolved over the past 20 years to include high capacity, industrialized practices involving batch production. Such products often enter interstate commerce and are delivered to health care settings in the absence of a specific patient prescription.


In contrast to FDA-approved drugs, pharmacy compounded products are not evaluated for safety and efficacy, can be exempt from current good manufacturing practice requirements (cGMP), and lack standard product labels and instructions for safe use.

Compounding pharmacies also are not required to report adverse events to the FDA. Nevertheless, despite the fact that all compounded products are viewed by the FDA as “unapproved drugs,” their availability has become an integral part of the daily practice of medicine and pharmacy in this country.

The current “market” for pharmacy compounding comprises a diverse array of practices,some of which overlap.  These include: traditional compounding, anticipatory compounding, hospital pharmacy-based compounding and hospital outsourcing of sterile compounding services.


The United States Pharmacopeia Convention (USP), publisher of the United States Pharmacopeia and the National Formulary (USP–NF), the official compendia for drugs marketed in the United States, developed a set of enforceable compounding standards for practice.


At the State Level

Compounding pharmacies are licensed and regulated by their respective state boards of pharmacy. Some states require adherence to USP standards, while others rely on their own regulatory standards.  In an effort to improve standards, the Pharmacy Compounding Accreditation Board (PCAB) was created in 2006 through the combined efforts of several national pharmacy organizations and USP. The mission of PCAB is to promote high quality pharmacy compounding through a voluntary accreditation program that recognizes adherence to established principles, policies and standards.

PCAB accreditation gives patients, prescribers, and payers a way to select a pharmacy that meets or exceeds USP’s quality standards. PCAB accreditation means the pharmacy has independent, external validation that it meets nationally accepted quality assurance, quality control, and quality improvement standards. However, only about 200 compounding pharmacies are currently accredited out of an estimated total of 7,000. A searchable state-by-state listing of accredited compounding pharmacies is maintained on the PCAB website.

At the Federal Level:

The FDA has long been concerned about pharmacy compounding practices that deviate from the traditional model. The FDA first issued a Compliance Policy Guide (CPG) in 1992 that described certain factors that the Agency would consider in its enforcement approach to pharmacies that were producing drugs and appeared to be functioning more as manufacturers. That CPG remained in effect until Congress enacted the Food and Drug Administration Modernization Act of 1997. This legislation added a new Section 503A to the Food Drug and Cosmetic (FD&C) Act addressing FDA’s authority over compounded drugs. In doing so, Section 503A exempted compounded products from new drug approval, cGMP requirements, and adequate directions for use requirements under certain circumstances, and set forth conditions that must be followed by pharmacies or physicians in order to quality for these exemptions. It should be noted that the FDA revised the CPG in 2002

The FDA also can conduct “for-cause” inspections based on complaints.


Some risk factors are common to both patient specific and batch pharmacy compounding such as; facility characteristics, personnel training, level of standardization, verification mechanisms, and compliance with standard operating procedures.

For patient-specific compounding, beyond use dating and storage outside of the pharmacy also need to be addressed. For sterile batch compounding, standard operating procedures, segregation of materials, batch sizes, in-process checks, and sterilization methods assume increasing importance.

The larger the operation, the more closely these processes should be aligned with cGMP. Product quarantine, assurance of sterility, and recall mechanisms are necessary requirements for compounding manufacturers, not to mention assurance of batch potency. Product volume and whether the facility attempts to generate product beyond its capabilities or to fill a temporary gap created by commercial drug shortages represent other categories of risk.

Finally, distribution, storage, and repackaging practices also are relevant.


According to the National Conference of State Legislatures, several states have introduced bills related to the regulation of compounding pharmacies. One issue is potential limits on office-use dispensing, or the practice of physicians obtaining compounded products without a patient prescription to be used in an office setting. At the state level, interest is moving in the direction of regular inspections, composition of state boards to include the relevant expertise for addressing sterile compounding issues, and more widespread adoption of USP standards for sterile compounding.

In early May, bipartisan legislation intended to clarify oversight for pharmaceutical compounding was introduced in the Senate (S. 959−Pharmaceutical Compounding Quality and Accountability Act). This goal of this legislation is to establish a clear boundary between traditional compounders and compounding manufacturers, and establish uniform federal quality standards for compounding manufacturers.

The legislation also prohibits the compounding of certain categories of drugs. It also preserves the state’s primary role in the oversight of traditional pharmacy compounding, and permits limited quantities of products derived from anticipatory compounding, although biologics would be excluded from this practice, except in narrow circumstances.

The AMA submitted formal comments on the draft legislation, but it is not clear at this time how quickly this bill will move or what the final elements will be.


The Senate cleared a key hurdle Tuesday for a bill intended to  increase oversight of compounding pharmacies — which operate like drug manufacturers but have been regulated loosely. Tuesday’s procedural vote in the Senate was the most significant test, requiring a 60-vote majority. It passed, 97 to 1. The House has already approved the measure. IT is expected to reach President Obama’s desk this week, once the Senate takes a final vote.


The use of compounded products is deeply embedded in the U.S. healthcare system. While traditional compounding pharmacies licensed and regulated by states continue to provide important patient-specific services, the overall practice of pharmacy compounding has evolved into an industrial-scale national business.

Given the evolution of the pharmacy compounding industry, the current reliance of the healthcare system in this country on compounded drug products, and the accumulation of patient harm, the Council believes a clear need exists for more effective and appropriate oversight.

A need exists to establish a clear boundary between traditional compounders and compounding manufacturers and to clarify specific areas of jurisdiction for the FDA and state boards of pharmacy. Because of the extensive array of current pharmacy compounding practices, and dependence of the healthcare system on such products, changes to the current system must be accomplished in a stepwise manner and in a way that does not otherwise jeopardize patient care. In the absence of a suitable FDA-approved product, allowances also should be made for the conduct of compounding practices that can supply products needed to manage urgent and emergent care scenarios in a safe manner.


Read the full AMA Council on Science and Public Health report on “Pharmacy Compounding.”

—  Russell Kridel, M.D.