503B Compounding Pharmacy

In this post, Fagron Sterile Services President Carl Woetzel, Global Quality Director Jason McGuire, and Vice President of Operations Jason Winfield describe key elements of 503B outsourcing facilities. They discuss the critical role that 503B compounders play in bringing sterile drugs to market with expedience, efficiency, and safety. Fagron partners with ambulatory surgery centers (ASC), hospitals, and other health care facilities to ensure excellent patient care and positive outcomes.


Also known as 503B compounding facilities, and compounding outsourcing facilities, these are specialized types of drug manufacturing organizations that serve a critical role in the patient care continuum. They are also referred to as 503B outsource compounding centers. 503B outsourcing facilities strike an important balance between large pharmaceutical manufacturers and traditional compounding pharmacies. [1]

Health and science experts work together in a spirit of true innovation as they produce pharmaceutical preparations to support patient care. The result? Personalized medication solutions for healthcare facilities that support patients whose conditions are particularly challenging. [2] As stated by the United States Pharmacopoeia (USP), "... 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). [3]

"The most correct term is 503B Outsourcing Facility. Upon the development of the DQSA (Drug Quality and Security Act) in 2013, the FDA  created the new section 503B which defines an Outsourcing Facility’s role and responsibility for producing pharmaceutical products.  In essence, a 503B Outsourcing Facility was given guidance on how to manufacture finished products in large quantities.  The focus of the guidance is on how the facility maintained, and followed, applicable cGMPs and best practices, especially as it relates to aseptic processing and the necessary critical control parameters." — Jason McGuire, Global Quality Director

A Brief History 0f 503B Pharmacies

Section 503B of the Federal Food and Drug Administration Act was brought into being as a result of poor oversight and substandard compounding practices at the New England Compounding Center. The tragic consequence was a severe outbreak of fungal meningitis. [4] Although the practice of pharmacy compounding had been around or decades, and somewhat taken for granted, it was suddenly thrust into the national spotlight.

Subsequently, the enactment of the DQSA in 2013 authorized the FDA, under Sections 503A and 503B, to essentially create two types of compounding entities: 503A compounding pharmacies, and 503B compounding facilities. 

The similarities and differences between the two types of compounders are described in more detail in one of Fagron Sterile Services’ recent blogs

Held to High Standards

503B compounding facilities must comply with extremely stringent regulatory requirements.  

"A 503B compounder is a designation created by the FDA for outsourced hospital manufacturing services associated with the sterile production of injectable and parenteral medicines. This new designation increased the level of quality and compliance associated with the manufacturing facilities, processes, and practices. It required all 503Bs to comply with strict cGMP (Current Good Manufacturing Practices) guidelines (21 CFR Parts 210 & 211). These are the same ones that innovative and generic pharmaceutical manufacturers are held to; and regulated by state board of pharmacies, regulatory authorities such as FDA & DEA (Drug Enforcement Administration), as well as customer quality & compliance representatives." — Jason Winfield,  Vice President of Operations

Current Good Manufacturing Practices provide numerous mechanisms for manufacturers to supply drug products that are pure, safe, and effective. These procedures also equip FDA inspectors with guidelines and regulations regarding the issuance of observations, warning letters, and injunctions. [5]

Per the cGMP, compounded drugs must be manufactured under the following conditions:

  • Registered and suitable facilities on properly calibrated equipment.
  • Properly validated production systems using only authorized materials.
  • Materials must be processed by appropriately trained personnel.
  • All  products must be packaged and labeled according to a quality management system 
  • Environmental monitoring must be conducted at every production shift in the ISO 5 primary compounding areas. It must also be conducted weekly in the secondary areas. [6] 

USP Chapter 797 was one of the first US practice standards enforceable by the FDA. It describes numerous conditions that are unacceptable and could compromise patient safety. [7]

  • Microbial contamination (non-sterile conditions).
  • Excessive bacterial endotoxins.
  • Unacceptable variability in strengths of certain ingredients.
  • Unintended contaminants.
  • Compounded sterile preparations (CSPs) containing ingredients of inappropriate quality. [8]

The leadership at Fagron Sterile Services fully embraces the dedication to quality assurance that has come with adherence to cGMP, USP and other applicable regulations, including those of various state boards of pharmacy. 

"This new 503B designation increased the level of quality and compliance associated with the manufacturing facilities, processes and practices. By creating outsourcing facilities, Congress gave hospitals and other facilities the opportunity to safely outsource manufacturing services associated with the sterile production of injectable and parenteral medicines." — Jason Winfield

Stability in the Supply Chain

503B facilities such a Fagron (with its impeccable safety record) are well-positioned to be trusted partners in ensuring that all compounded products are in stock and ready to ship to partnering healthcare facilities. 

Jason Winfield - "Fagron maintains a greater than 97 percent fulfillment rate, meaning that more than 97 percent of the time an order is placed, that order is filled the same day."

Drug products are delivered to health care facilities in sterile, ready-to-use presentations. Labeling meets all regulatory requirements, including ISMP (Institute for Safe Medication Practices). This eliminates the need for pharmacist, nurse, or other healthcare provider manipulation. Some examples of provider manipulations include the following:

  1. Separating multi-dose vials into single syringes.
  2. Aspirating from glass vials or ampules into syringes.
  3. Reconstituting lyophilized powders with sterile dilutents.

With tedious tasks like the above taken off of the hands of already over-worked health care providers, valuable time is allowed for more important responsibilities, such as direct patient care, patient education, and collaboration with colleagues. 

Many 503B facilities are solely involved in the compounding of sterile-to-sterile medications. 503B compounders who only offer these services have a high chance of not being able to supply the necessary drugs to ASCs, health systems, or hospitals during drug shortages. 

New Pathways to Excellent Care

Strategic 503B facilities can serve their customers well by starting with approved bulk drug substances and then taking this process through to the final drug product. This is called API-to-sterile drug compounding. Compounding drug products from bulk drug substances is allowed as long as the drugs are on an approved FDA list. A 503B compounding facility may also manufacture copies of medications from bulk drug substances if the drug products are on an FDA shortage list. [9] 

Jason Winfield: "API-to-sterile compounding is safe and effective. Any suggestion to the contrary is simply untrue. APIs are sourced from FDA registered vendors, who are audited by Fagron on a regular basis. Additionally, all APIs are qualified and tested in accordance to their USP monograph prior to release for use in the commercial manufacturing process."

Although both processes assure patient safety, API-to-sterile drug compounding requires fewer steps, thus making the whole process more efficient. This creates increased cost-effectiveness, and these benefits are passed on to customers. 

503B compounding pharmacies could indeed be considered in the 'sweet spot' between traditional pharmacies and large drug manufacturers. 503B facilities are required to comply with many of the same requirements of traditional pharmaceutical manufacturers: cGMP, DQSA, FDA, ISO, and USP regulations. Still, they are not as restricted as traditional 503A compounding pharmacies. They can still manufacture medications in large batches. 

The reach of 503B outsourcing facilities can be quite broad. Maybe this is why Carl Woetzel, President of Fagron Sterile Services sees 503B facilities as 'Outsource Compounding Centers.' 

"I prefer to refer to 503B facilities as "Outsource Compounding Centers" as the industry has mostly moved from a traditional pharmacy model to become a true drug manufacturing facility. A reputable 503B in today’s world strictly adheres to FDA regulatory standards (called current good manufacturing practices) in a manner that is very similar to a pharmaceutical manufacturer. A 503B produces ready-to-use medications needed in healthcare facilities. 503Bs fulfill a market need because they have the safety and reliability of a drug manufacturer but a much nimbler approach to creating customized options for their customers."

Reducing the Regulatory Burden

503B outsourcing facilities can be instrumental in supporting the regulatory requirements of hospitals, ASCs, and other health systems. 503B facilities professionals have intimate knowledge of FDA rules due to the stringency of regulations such as cGMP and USP, which have become almost second nature.  

A partnership with Fagron eliminates the necessity for providers to prepare medications on-site, where chances of less than ideal conditions can compromise purity. The trials and tribulations of medication administration can be much alleviated when drug products come in ready-to-use, customized, and clearly labeled containers.

Fagron manufacturing facilities are inspected yearly, sometimes every 6 months by the FDA, DEA, and other state boards of pharmacy.  In addition, Fagron hosts at least 15-20 customer audits every year. 

Jason McGuire: "The ASC auditing bodies are verifying their vendors maintain the necessary compliance standards. So long as we keep our house in order, then it makes it easier for ASCs to respond to questions in the event of an audit at their site."


Just as 503A compounding pharmacies can provide high-quality drug formulations for a diverse patient population with varying drug tolerances; so can a dedicated and hardworking 503B organization like Fagron Sterile Services provide excellent customer service that fulfills scalable drug compounding needs. 

All 503B outsourcing facilities are held by numerous state and local regulatory bodies to a very high standard of safe and effective drug manufacturing. Fagron products pass rigorous testing of sterility, quality, and potency, from product receipt to the end of shelf life. 

FSS offers independent ISO 5 classified aseptic processing environments, industry-leading automation, advanced environmental monitoring and FDA/DEA inspected quality testing labs, as well as top-tier customer service.

We specialize in Sterile-to-Sterile, API-to-Sterile, and Biologics. Solutions Include:

Fagron Sterile Services US (FSS) is an expert in 503B Pharmaceutical Outsourcing with experience across three decades.

Set up a free consultation today and learn more about a 503B solution you can rely on.

Fagron Sterile Services Product CatalogView Catalog Here.


[1] Fagron Sterile Services. (2020, June 2). How ambulatory surgery centers (ASCs) can benefit from pharmaceutical outsourcing facilities: 8 questions answered.
[2] Fagron Sterile Services. (2020, May 5. 503A vs. 503B Compounding Pharmacies: Similarities and Differences.
[3]United States Pharmacopeia. (n.d.) General Chapter 797 Pharmaceutical Compounding - Sterile Preparations. United States Pharmacopeia. (Quote from paragraph 1.)
[4] PEW Charitable Trust (2014, May 21). Ensuring the safety of compounded drugs: Study highlights key quality standard.
[5] FDAGroup. The Importance Of CGMP To The Safety Of Compounded Drugs.
[6] Ibid
[7] Clinical IQ. Quality Standard for Large-Scale Manufacturing Facilities.
[8] Ibid
[9] PEW Charitable Trust. (2020, June). Market for Compounded Drugs Needs Greater Transparency and Regulatory Certainty FDA, states, and hospitals can help improve access to customized medication. 

Sean Jones, MBA
Senior Director of Marketing at Fagron North America, with more than a decade of experience in the pharmaceutical and healthcare industries.