What is a Compounding Pharmacy?

Pharmaceutical compounding (done in compounding pharmacies) is the creation of a particular pharmaceutical product to fit the unique need of a patient. To do this, compounding pharmacists combine or process appropriate ingredients using a variety of equipment and tools. Compounding may be done for medically necessary reasons, such as to change the form of the medication from a solid pill to a liquid to avoid a non-essential ingredient that the patient is allergic to, or to obtain the exact dose(s) needed or deemed best of particular active pharmaceutical ingredient(s). It may also be done for other reasons, such as adding flavors to a medication or otherwise altering taste or texture.

Compounding is most routine in the case of intravenous/parenteral medication, typically by hospital pharmacists, but is also offered by privately-owned compounding pharmacies and certain retail pharmacies for various forms of medication. Whether routine or rare, intravenous or oral, etc., when a given drug product is made or modified to have characteristics that are specifically prescribed for an individual patient, it is known as “traditional” compounding.

Examples of compounded formulations include medications with alternative dosage strengths or unique dosage forms, such as topical creams, suspensions or solutions with more tolerable drug delivery vehicles. A physician may also work together with a pharmacist to repurpose or reformulate via the compounding process drugs that have been approved by the U.S. Food & Drug Association (FDA) to meet a patient’s specific medical needs.

The highly fragmented compound pharmacy industry occupies a unique and changing niche in the pharmaceutic marketplace. Due to changes in the regulatory environment, compounders are currently faced with an unavoidable and much higher degree of regulatory compliance than in the past. This is especially true for “batch” compounding done for doctors’ offices and hospitals. The segmentation of compounding facilities by the FDA separates compounders into 503(a) and 503(b) categories, with the fundamental difference that the 503(a) license allows pharmacies to fill individual prescriptions, while the 503(b) license allows pharmacy operators to sell bulk prescriptions that hospitals and doctors can hold in inventory.


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