In recent years, the drug-compounding industry has embraced United States laws, mandates, and regulatory requirements to ensure reliable, safe, and cost-effective medications to physicians and their patients. The Food and Drug Administration (FDA) has mandated two designations for compounding pharmacies that serve to balance patient-specific needs with the increasing demand for high-quality compounded drugs. These specialized pharmacies are categorized as either 503A or 503B facilities. This article provides a review of important similarities and differences; which will allow hospital systems, ambulatory care centers, and other health care organizations to make informed decisions in the interest of patient safety, medication effectiveness, and consumer satisfaction.

Why Compounding? According to the United States Pharmacopoeia (USP), “Millions of medications are compounded each year in the US to meet the unique needs of patients. Compounding provides access to medication for patients who may not be able to use commercially available formulations due to dosing requirements, allergies, or rare diseases.” (paragraph 1).[1] Vulnerable populations such as senior citizens and children may also benefit from slightly altered preparations.[2] Thus, compounding facilities offer multiple personalized options for the unique needs of a diverse patient population.

503A Compounding Pharmacies

Populations Served

503A facilities are more closely related to what might be considered “traditional compounding pharmacies.” They provide compounded medications to fill individual patient-specific prescriptions. They are designated by the FDA for home use. Under Section 503A, only very limited amounts of batch drugs can be produced. An example of this would be the provision of only a 30-day supply to meet specific patient needs. Pharmacies categorized under this section would also only be able to supply sterile medications under patient-specific conditions.

It is important to note that preparations in 503A pharmacies, because they are customized, cannot be produced in large batches. This makes the medication more expensive. Ultimately, this cost is passed on to the patient, at times making much-needed medications cost-prohibitive.

Although 503A pharmacies must be registered with the Drug Enforcement Administration (DEA) and their state boards of pharmacy, they do not need to be registered with the FDA.

Regulatory Compliance

Medications that are prepared in 503A facilities need to comply with requirements according to their respective state boards of pharmacy regulations and USP requirements 795 and 797. 503A pharmacies are required to perform environmental monitoring inspections every six months. Beyond Use Dating (BUD) is executed according to external scientific evidence, but not necessarily according to rigorous scientific testing.

Unlike 503b facilities, they do not need to comply with Current Good Manufacturing Practices (cGMP). This means that the preparations are not tested according to potency, integrity of label claims, or stability. Such issues create potential problems in the reliability of the compound to effectively treat the patient. Interestingly then, the positive impression of “patient-specific” may be somewhat of a misnomer in a 503A facility.

503B Compounding Pharmacies

Populations Served

503B pharmacies are those with outsourcing facilities that produce large batches of medication for use in healthcare facilities, ambulatory surgery centers, healthcare systems, and physicians’ office use. Like 503A facilities, they additionally have the option to fill patient-specific prescriptions

Regulatory Compliance

The Drug Quality and Security Act (DQSA) was signed into law in 2013. It essentially created Section 503B, allowing this new type of compounding pharmacy to exist. Because these entities may produce a much wider range of drug products, the related regulations are decidedly more extensive. Sterile as well as non-sterile medications can be mass-produced in a facility that is designated as 503B. Registration requirements include the FDA as well as the DEA and the residing state boards of pharmacy.

The regulations required of 503B compounding pharmacies are much more stringent than for 503A pharmacies. Like 503A facilities, compliance with USP 795 and 797 and respective state boards of pharmacy are required. Most notably, 503B facilities must also strictly adhere to cGMP requirements (21 CFR Parts 210 & 211).

Regulatory Compliance in Compounding Processes

CFR part 210 addresses the manufacturing of the specific medications and includes the compounding process, packing, and holding of medications. Whereas part 211 addresses the quality of the finished product, such as stability testing and labeling.[3] Quality assurance inspections of raw materials are conducted by independent entities to prevent any untoward bias. Furthermore, all testing methods must be validated prior to any active testing to assure compliance with USP testing standards. A product list must be provided biannually to the FDA.

503B outsourcing facilities are required to develop standard operating procedures and implement environmental monitoring that complies with standards of laboratory cleanliness according to the International Organization for Standardization (ISO).[4] Different types of pharmacy compounding areas require different levels of air cleanliness to prevent potentially fatal contamination of drug products. This specialized type of monitoring must occur much more often than in 503A facilities. Indeed, environmental monitoring must be performed (and of course documented) at minimum each production shift for ISO 5 areas. If compounding areas are designated as ISO 7 or 8, environmental monitoring must be carried out weekly to meet these critical requirements of air cleanliness.

Summary of Findings

It is apparent that the regulatory requirements, laws, and standard operating procedures are decidedly heavier for 503B compounding pharmacies. It is no accident that they may also be referred to as outsourcing facilities. These expansive but intricate systems have the ability to produce large batches of very high-quality sterile and non-sterile drug compounds. They are steady and stable in standard operating procedures, regulatory compliance, and raw material resources. 503B compounding pharmacies are therefore completely able to meet the supply demands of hospitals, healthcare systems, and ambulatory surgery centers. Even so, patient safety and the effectiveness of medications will always be at the forefront. Because the patient always comes first.


[1] United States Pharmacopeia. (n.d.) General Chapter 797 Pharmaceutical Compounding – Sterile Preparations. United States Pharmacopeia. Retrieved from: https:// (quote from paragraph 1).

[2] United States Pharmacopeia. (n.d.) General Chapter 795 Pharmaceutical Compounding – Sterile Preparations. United States Pharmacopeia. Retrieved from: https:// Retrieved from: https://

[3] Master Control (n.d.). FDA 21 CFR Part 210-211. Retrieved from: American Society of Health System Pharmacists [ASHP]. ASHP guidelines on compounding sterile preparations. Drug distribution and control: Preparation and handling. American Journal of Health -System Pharmacists. 71:145-66. Retrieved from:

[4] American Society of Health System Pharmacists [ASHP]. ASHP guidelines on compounding sterile preparations. Drug distribution and control: Preparation and handling. American Journal of Health -System Pharmacists. 71:145-66. Retrieved from:

Sean Jones, MBA

Marketing Manager at Fagron Sterile Services, with over a decade of experience within the pharmaceutical and healthcare industries

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