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The Benefits of Using Compounded Medications

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Medication being compounded

Where do your medications come from?

Bringing a new drug to the market in the US requires a big investment and a lot of work. The process begins when a scientist or researcher discovers a new drug. If the drug has potential uses that are both beneficial towards the treatment of a disease or condition, and also profitable for business, then a company or group will typically fund the investment needed to bring the proposed drug to the market. To do this, the company must first submit a New Drug Application (NDA) along with all the data collected to prove efficacy and safety. It is the responsibility of the company seeking to market a drug to test it and submit evidence that it is safe and effective. This is done through a series of laboratory and clinical trials. Clinical trials are experiments that use human subjects to see whether a drug is effective, and what side effects it may cause. The clinical trials are usually outsourced to an organization that specializes in conducting and managing large scale studies that are designed to satisfy the FDA requirements for new drug approval. A commercial drug manufacturer is contracted to exclusively make the new drug product. The manufacturer may also help develop the final product including the formula, dosage form, and excipients used in the formula. New drugs, like other new products, are frequently under patent protection during development. The patent protects the company’s investment in the drug’s development by giving them the sole right to sell the drug while the patent is in effect. The potential revenue generating from holding this patent provides incentive for companies to invest into new drug development despite the risk of a drug not being approved. When the patents or other periods of exclusivity on brand-name drugs expire, manufacturers can apply to the FDA to sell generic versions which usually enter the market at much lower costs. Patents typically last for 7 years however pharmaceutical companies can apply for extensions under certain circumstances.

A recent Tufts study put the average cost to develop a new medicine at more than $2.5 billion. 60% of those costs are in clinical trials. This is one reason commercial drug products are sold at a high price. Unfortunately, once the initial investment has been recovered in addition to generating profit, many commercial pharmaceutical companies continue to increase the drug price even though the manufacturing costs decrease over time. This is one reason why it is important to know where to look for alternative sources for medications.

Where are drug products made?

Pharmaceutical products are made at one of the following facilities who then sell product to retail pharmacies. Retail pharmacies (ex. CVS) stock the medications until a patient arrives with a prescription for the medication.

Compounding pharmacies are unique since they make medication at the pharmacy, then dispense directly to patients from the same facility.

Here are the three main sources of pharmaceutical production in the US:

Drug manufacturer

If you have ever been prescribed a medication, it is most likely you have taken a drug that was commercially manufactured. Drug manufacturers produce a single or limited number products manufactured in very large batches for commercial sales at a high retail price. They produce familiar brand and generic medications commonly prescribed by doctors every day. Before a commercial drug manufacturer can bring a new drug to the market, they must first receive FDA approval for the drug which requires long clinical trials and millions of dollars. Once the new drug is approved, the drug manufacturer is awarded a patent that secures them as the only manufacturer allowed to make the drug in its patented formula. The patent typically expires after 7 years, allowing other manufactures to make generic versions at a lower price.

503A compounding pharmacy

Many towns and cities across the US have at least one compounding pharmacy to provide the community access to custom medications. A compounding pharmacy makes custom medications for patient-specific prescriptions. Medications are made per the prescription since each patient may require a different strength or combinations.

503A compounding pharmacies can also produce custom medications frequently ordered in small batches. Compounding pharmacies typically specialize in different types of medications, including sterile and non-sterile preparations.

503B outsourcing facility

503B outsourcing is a new concept established by the FDA in 2013 that essentially brings together pharmaceutical manufacturing with custom compounding.

A 503B facility is an FDA registered pharmacy who can compound a variety of products in large batches using automated and semi-automated equipment. Apart from new drug labeling and drug event reporting regulations, the FDA requires 503B outsourcing facilities to compound all drugs utilizing Current Good Manufacturing Practices (cGMP), the same standards large pharmaceutical manufacturers use. This type of facility is ideal for custom medications that are ordered in bulk for office use and administration.

A 503b pharmacy does not require a patient prescription, instead a clinic or doctor orders a supply of medications that will be stored at the clinic for later use in patients for treatments administered at the clinic (i.e. IV or injection). 503B pharmacy compounds sterile and non-sterile medications that are not available through commercial manufacturers and/or require customization by the prescriber. Tri-Mix is one example of a commonly prescribed urology medication that is only available at a compounding pharmacy who is licensed to manufacture sterile medications for both patient and clinic use (503b). Tri-Mix is a custom sterile injectable medication that combines three ingredients into a single injection that doctors administer at the clinic and allow patients to self-inject at home. Another example is intravenous nutrition (micronutrients), where many of the sterile nutrient formulations are only available at a 503B pharmacy.

What is a ‘Compounding Pharmacy’?

At one time, nearly all prescriptions were compounded, or made from scratch by a local druggist or sometimes by the physician right in the clinic. With the advent of mass drug manufacturing in the 1950s and ‘60s, compounding rapidly declined as doctors came to rely on commercially branded drugs. The pharmacist’s role as the preparer of medications quickly changed to that of a dispenser of manufactured dosage forms, and most pharmacists were no longer trained to compound medications. However, the “one-size-fits-all” nature of many mass-produced medications meant that some patients’ needs were not being met. Fortunately, compounding has experienced a resurgence as modern technology and innovative techniques and research have allowed more pharmacists to customize medications to meet specific patient needs.

Compounding provides a source of affordable medications that are unique in formula and dosage form, providing patients with almost unlimited options to personalize their care.

What the FDA says: In general, compounding is a practice in which a licensed pharmacist, a licensed physician, or, in the case of an outsourcing facility; a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

How do Compounding Pharmacies Customize Drugs?

Compounding pharmacies (CP) make drugs into different dosage form.

Some patients require an alternative dosage form. An alternative dosage form can be used to bypass a health issue that limits the patient’s ability to use a medication in its current form, or to improve the absorption and metabolism of the drug.

CP combine different medications to create a custom formula.

Some commercial medications are limited in availability and administration. For example, doctors who treat thyroid hormone imbalance sometimes require a combination of two thyroid medications called liothyronine and levothyroxine administered to the patient in a ratio that is usually specific to the patient. These two hormone medications are available commercially as separate tablets that must be co-administered, increasing the cost and the risk of a patient dosing error when attempting to cut the tablets into smaller dosages. Compounding allows doctors the ability to combine both medications into a single capsule at different ratios.

CP customize the concentration to provide unique dosages.

When patients require a dosage that is not available in commercial medications, doctors utilize compounding pharmacies to create customized strengths. Hormone replacement therapies provide a good example of medication types that often require very small adjustments, sometimes by a fraction of a milligram. Compounding allows the doctor to order a medication in different strengths so that patients receive personalized treatment.

Compounded medications exclude ingredients due to allergies or other sensitivities.

  • No dyes
  • No fillers
  • Preservative free options

Many compounded medications require more than one change.

Example: A doctor determines that a patient would benefit from a combination of drugs that needs to be applied to the skin using a transdermal cream. The drugs are available currently as individual tablets but there is currently no commercially available medication that the patient can source for the transdermal cream that the doctor prescribed, therefore the doctor decides to use a compounding pharmacy. Once the prescription order is received, the compounding pharmacy combines the drug ingredients into a transdermal cream base at concentrations prescribed by the doctor.

The ability to customize allows the doctors to prescribe medications in alternative dosage forms, drug combinations, and concentrations, essentially creating new drug products using approved ingredients.

What is the difference between compounding and manufacturing pharmaceutical products?


  1. Compounding, to compound: to make a product using one or more ingredients. Products are ‘compounded’ on a smaller scale, usually customized for a specific patient or for a doctor’s treatment program.
  2. Manufacture: to make a product on a large scale using automated or semi-automated machinery
    All pharmaceutical products that are in the US are either manufactured or compounded. It is important to understand the difference.

A compounding pharmacy orders raw pharmaceutical and chemical ingredients to make (compound) custom drug orders for specific patients. Compounded medications are usually made per order, or in small batches, using manually operated equipment and tools. The process is facilitated by a pharmacist and team of pharmacy technicians who are trained in sterile and non-sterile compounding.

A pharmaceutical manufacturer uses automated or semi-automated equipment to make a single product in high volume, producing large batches of product that can be distributed to pharmacies and suppliers.

All drug compounders and manufacturers must follow strict protocols to meet regulations that are enforced by responsible agencies. Regulations, guidelines, and good practices are important towards ensuring the safety of patients who can always expect to be given a quality medication that has been validated with analytical testing.

Must order drug ingredients from an FDA approved chemical supplier.

  • Commercial drug manufacturers
  • 503b outsourcing pharmacy
  • 503a compounding pharmacy

Must follow FDA regulations pertaining to the compounding or manufacturing of pharmaceutical products.

  • Commercial drug manufacturers
  • 503b outsourcing pharmacy
  • 503a compounding pharmacy

Must adhere to cGMP manufacturing practices using validated equipment.

  • Commercial drug manufacturers
  • 503b outsourcing pharmacy

cGMP refers to the Current Good Manufacturing Practice regulations enforced by the US Food and Drug Administration (FDA). cGMPs are followed by pharmaceutical companies to ensure that drug products and active pharmaceutical products are manufactured to specific requirements including potency, strength, quality, stability, and purity.

Must follow USP guidelines for the compounding of pharmaceutical ingredients.

  • 503a compounding pharmacy
  • 503b outsourcing pharmacy

USP is different from cGMP, although both are controlled and enforced by the FDA. USP refers to United States Pharmacopeia and is the accepted standard that needs to be met when compounding medications and nutritional supplements. USP establishes written and physical standards for medicines, food ingredients, and dietary supplement products. These standards are used by regulatory agencies and manufacturers to help to ensure that these products are of the appropriate identity, as well as strength, quality, purity, and consistency. cGMP focuses its required standards specifically on high volume manufacturing of sterile pharmaceutical products while USP is the standard that needs to be met when compounding a single or small batch pharmaceutical product or nutritional supplement. cGMP standards are stricter than USP, for example USP requires pharmacies to conduct surface sampling one per month while cGMP requires manufacturers to conduct daily surface sampling on more surfaces using validated analytical testing.

Must follow State Boards of Pharmacy.

  • 503a compounding pharmacy
  • 503b outsourcing facility

Acompounding pharmacy is regulated by the board of pharmacy or responsible agency in each state the pharmacy holds an active license. In addition to following FDA cGMP and/or USP standards, the pharmacy must also follow each state’s guidelines and requirements pertaining to compounded medications.

Finished product and Required Testing

The manufacturing and compounding process is tightly regulated to ensure that the pharmaceutical product is safe for a patient to use.

Once a drug is made into a finished product by the manufacturer or compounder, it then must pass a series of regulatory protocols which include testing before becoming available to patients through a pharmacy.

Quantitative analysis is performed per USP requirements on each batch to determine concentration of the active ingredient(s). Potency testing is performed by an independent FDA registered laboratory. Ingredients used in compounding procedures are determined to be stable, compatible, and appropriate for use, according to USP guidelines. Certificates of Analysis are received from manufacturers for ingredients used in compounded preparations. Tests are performed according to USP ‹797› & ‹71› guidelines. Components and finished preparations undergoing end-preparation testing, remain in quarantine until testing results are received and are reviewed by our quality control team and a compounding pharmacist before release. Every sterile batch is tested for pH, sterility, endotoxin, and appearance when necessary USP <71>, <85>, and <797>. In addition, the tests for each formula have been validated through a method suitability and have been tested for particulate count USP <51> and <788>. In addition, empower pharmacy has performed container closure integrity testing on each vial assembly (for sterile products) to ensure vials contain a barrier for a minimum of to two years.

Defy Medical uses a Compounding Pharmacy to Source Quality of Life Medications

Defy Medical uses both 503a and 503b pharmacies who compound sterile and non-sterile pharmaceutical products that are customized by the prescribing physician for a specific patient or to improve efficacy. Many of the commonly prescribed medications prescribed for integrative wellness and hormone replacement therapies (HRT) are not available commercially, making a compounding pharmacy a valuable source for patients seeking these types of treatments. In addition, most commercially manufactured quality of life medications are not covered by insurance and are sold to patients for a high price that is often too expensive to afford. The cost of a compounded medications are often significantly lower that commercial brand name products (roughly 10% of the retail price), making them more accessible to all patients who need ongoing treatment. One example are PDE-5 inhibitors prescribed for erectile dysfunction. The price for a 100mg Viagra brand tablet costs between $50-$70 at a retail pharmacy, while compounded sublingual sildenafil tablet costs $5-$10 per 100mg dose. Sildenafil is the generic form of Viagra.

Defy Medical uses a Compounding Pharmacy to provide personalized patient care and increased access to quality of life medications. 503b facilities are the preferred source for sterile medications due to the FDA required stability studies and much higher standard of manufacturing that a 503b must follow.