- Sarah Millard, Medically reviewed by Luke Wright, PharmD
- May 5
- 3 min read
Compounding 101: a quick guide for patients and clinicians
People want and need transparency. Today, we bring data and information to the table - specifically, what compounding is, how compounding pharmacies are regulated, and what compounded medications can do.
Highlights
Compounding is a practice of pharmacy
Compounding pharmacies are regulated
Compounded medications serve clinical needs
What is compounding?
The modern age of pharmaceutical compounding began in the 1800s with the isolation of various compounds to produce antibacterial medications. Today, compounding remains an important and integral practice that provides specialized formulations when commercial medicines are unavailable or inappropriate.
Compounding defined
Compounding, by definition, implies combining or adding elements or parts to form a new whole. In pharmaceutical terms, compounding is the preparation of medications to meet needs not met by mass-produced formulations, or to fill gaps in the event of shortages or discontinuities. Generic drugs are not the same as compounded medications.
The compounding process
Compounding pharmacies create compounded medications through a multi-stage, regulated process that includes a prescriber consultation, ingredient selection and formulation, compounded preparation, medication storage, and quality control. This process transforms bulk substances into patient-centered medication solutions.
Ingredients used in compounding should be sourced from qualified, FDA-registered suppliers and are expected to meet applicable standards set forth in the United States Pharmacopeia-National Formulary (USP-NF) or the Food Chemical Codex. Patients should consult their prescriber or compounding pharmacist to understand ingredient selection and appropriateness for their specific therapy.
Why do compounding pharmacies exist?
Compounding exists to customize dose, form, or route. Compounding can manage shortages, serve patients who cannot use commercially available products, and provide medications for current unmet clinical and therapeutic needs. To meet these unique needs, pharmacists can prepare compounded medications. Compounded medications account for roughly 1 - 3% of the 5-6 billion total prescriptions written in the United States each year.
Compounding standards
The United States Pharmacopeia (USP) and the National Formulary (NF) are published compendia of drug standards that define the identity, strength, quality, and purity of medicines and ingredients. The first edition of the USP was published in 1820 and sought to establish a uniform standard to protect patients. The NF, first published in 1888, was designed to standardize medicines that were widely used in practice but not included in the USP. The USP-NF, having merged in 1975, is the single authoritative body that sets enforceable quality standards.
The FDA question - are compounded medications FDA-approved?
The difference between the USP-NF and FDA? They answer different questions and meet different needs.
The USP-NF sets enforceable quality standards for drug substances, dosage forms, fillers, and compounded preparations. The USP-NF does not decide if a drug should be used. It decides whether a substance or preparation meets quality standards. Whereas the FDA applies to specific, finished drug products. The FDA provides safety and efficacy review and market authorization. FDA approval is product specific, not ingredient specific.
Compounded medications are not FDA-approved products - this part is true. This is not a loophole or a failure. It is by design.
Compounded medications do not undergo FDA product approval partly because they are patient-specific or small-batch formulations.
Compounding regulations
Compounding pharmacies adhere to federal standards set forth by the USP, and are regulated by the state where the compounding pharmacy is based. Here's how it breaks down:
Federal.
Compounding pharmacies are authorized under the Federal Food, Drug, and Cosmetic Act (FD&C Act), which is administered and enforced largely by the FDA. The FD&C Act is the legal framework that allows compounding to exist.
The USP Compounding Compendium Chapters <795>, <797>, and <800> are the operating rules, procedures, and methods of the compounding pharmacy. These chapters cover facilities, personnel, equipment, techniques, environmental controls, documentation, cleaning, training, and drug handling.
USP compounding preparation monographs are official standards that describe how a compound should be made then tested. The USP compounded preparation monographs specify the formula, dosage forms, preparation instructions, quality testing, and storage conditions.
State
Compounding pharmacies are subject to additional safety rules defined by the state where the compounding pharmacy is located. These regulations and inspection requirements vary from state to state.
Compounding safety
Compounding pharmacies must undergo inspections and audits set forth by federal and state governing bodies. Interestingly, the FDA does conduct surveillance and for-cause inspections of state-licensed pharmacies, though generally state boards of pharmacy have primary responsibility of day-to-day oversight. To ensure safety, verify that your compounding pharmacy is state-licensed.
The takeaway
Compounding pharmacies are legal, regulated, and clinically necessary components of modern healthcare. While compounded medications are not FDA-approved products, they are prepared under enforceable quality standards and exist precisely because FDA-approved drugs cannot meet every patient need. Compounding fills critical gaps by offering customized formulations, alternative delivery methods, and solutions during shortages. When practiced responsibly and transparently, compounding can function as an established complement to and extension of conventional medicine.
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