Healthcare Glossary

Compounding Pharmacy

Pharmacy
Also called: compounded medication, 503A pharmacy, 503B outsourcing facility

A compounding pharmacy makes medications to order rather than dispensing a factory-made product. A pharmacist combines or alters ingredients to produce a drug in a strength, form, or combination that is not commercially available: a liquid version of a pill for a child who cannot swallow tablets, a cream without a dye a patient is allergic to, or a drug that is in shortage. Traditional compounders are called 503A pharmacies and fill individual prescriptions; 503B outsourcing facilities make larger batches for hospitals under FDA oversight.

Compounded drugs are not FDA-approved, which is the important thing to hold in mind. They are legal and often necessary, but nobody has tested that specific batch for strength, purity, or sterility the way a manufactured drug is tested. In 2012, contaminated steroid injections from a Massachusetts compounder caused a fungal meningitis outbreak that killed 64 people, which is why the 503B category and its inspections exist. More recently, compounded versions of the GLP-1 weight-loss drugs sold for $200 to $400 a month while the brands listed above $1,000, and the FDA allowed them only while the brands were officially in shortage. Most health plans do not cover compounded drugs, or cover them only with a prior authorization.

The takeaway: if a compounded drug is suggested, ask two things: is there a commercial product that would do the same job, and is the pharmacy accredited by the Pharmacy Compounding Accreditation Board. Price is the third question, not the first.