Pharmacy Compounding of Human 
Drug Products Under Section 503A 
of the Federal Food, Drug, and 
Cosmetic Act 
 
 
Guidance 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
 
June 2016 
Compounding and Related Documents 
Revision 2 Pharmacy Compounding of Human 
Drug Products Under Section 503A 
of the Federal Food, Drug, and 
Cosmetic Act 
 
 
Guidance 
 
 
 
 
 
Additional copies are available from: 
 
Office of Communications 
Division of Drug Information, WO51, Room 2201 
Center for Drug Evaluation and Research 
Food and Drug Administration 
10903 New Hampshire Ave., Silver Spring, MD 20993 
Phone: 301-796-3400; Fax: 301-847-8714 
druginfo@fda.hhs.gov 
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm 
 
or 
 
Office of Policy 
Office of the Commissioner 
Food and Drug Administration 
10903 New Hampshire Ave. 
Silver Spring, MD 20993 
Phone:  301-796-4830 
 
 
 
 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
 
June 2016 
Compounding and Related Documents 
Revision 2 Contains Nonbinding Recommendations 
 
 
TABLE OF CONTENTS 
 
 
I.  INTRODUCTION .................................................................................................................... 1 
II. BACKGROUND ...................................................................................................................... 2 
III. POLICY .................................................................................................................................. 2 
A.  Conditions of Section 503A ........................................................................................................... 3 
B.  Provisions of Section 503A That Require Regulations or Other FDA Actions ........................ 5 
IV.   GUIDANCE ON REGULATORY ACTION ..................................................................... 6 
A.  Requirements Applicable to Drug Products That Meet the Conditions of Section 503A ....... 6 
B.  Enforcement Action When a Drug Does Not Meet the Conditions of Section 503A ............... 7 
C.  Enforcement Approach ................................................................................................................. 8  Contains Nonbinding Recommendations 
 
1
Guidance  
Pharmacy Compounding of Human Drug Products Under Section 
503A of the Federal Food, Drug, and Cosmetic Act 
 
 
This guidance represents the Food and Drug Administrations (FDAs) current thinking on this topic.  It 
does not create any rights for or on any person and is not binding on FDA or the public.  You can use an 
alternative approach if the approach satisfies the requirements of the applicable statutes and regulations.  
To discuss an alternative approach, contact the FDA staff responsible for this guidance as listed in the title 
page.  
 
 
 
 
I.  INTRODUCTION 
 
This guidance announces FDAs intention with regard to enforcement of section 503A of the 
Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 353a) to regulate entities that 
compound drugs, now that section 503A has been amended by Congress to remove the 
advertising and solicitation provisions that were held unconstitutional by the U.S. Supreme Court 
in 2002 (see section II below).  Several parts of section 503A require rulemaking and 
consultation with a Pharmacy Compounding Advisory Committee to implement.  This guidance 
explains how the provisions will be applied pending those consultations and rulemaking.  This 
guidance also describes some of the possible enforcement actions FDA can bring against 
individuals or firms that compound drugs in violation of the FD&C Act.   
 
This guidance does not apply to registered outsourcing facilities under section 503B of the 
FD&C Act.2  Guidance for outsourcing facilities will be issued separately.  
 
In general, FDAs guidance documents do not establish legally enforceable responsibilities.  
Instead, guidances describe the Agencys current thinking on a topic and should be viewed only 
as recommendations, unless specific regulatory or statutory requirements are cited.  The use of 
the word should in Agency guidances means that something is suggested or recommended, but 
not required. 
 
 
                                                 
1 This guidance was prepared by the Office of Compliance, Center for Drug Evaluation and Research at the Food 
and Drug Administration. 
2 Title I of the Drug Quality and Security Act created a new section 503B of the FD&C Act, entitled Outsourcing 
Facilities. See Pub. L. No. 113-54,  102(a), 127 Stat. 587, 587-588 (2013). 
  1  Contains Nonbinding Recommendations 
 
II.  BACKGROUND  
 
Section 503A was added to the FD&C Act by the Food and Drug Administration Modernization 
Act of 1997 (Public Law 105-115) (the Modernization Act).  Section 503A describes the 
conditions that must be satisfied for drug products compounded by a licensed pharmacist or 
licensed physician to be exempt from the following three sections of the FD&C Act: (1) section 
501(a)(2)(B) (concerning current good manufacturing practice); (2) section 502(f)(1) 
(concerning the labeling of drugs with adequate directions for use); and (3) section 505 
(concerning the approval of drugs under new drug applications (NDAs) or abbreviated new drug 
applications (ANDAs)).3   
 
Previously, the conditions of section 503A of the FD&C Act also included restrictions on the 
advertising or promotion of the compounding of any particular drug, class of drug, or type of 
drug and the solicitation of prescriptions for compounded drugs.  These provisions were 
challenged in court and held unconstitutional by the U.S. Supreme Court in 2002.4  Following 
that decision, in May 2002 FDA issued a compliance policy guide entitled Pharmacy 
Compounding (May 2002 CPG), which described how FDA intended to address pharmacy 
compounding of human drugs in the immediate future as a result of the Supreme Court 
decision.5  In 2013,  section 503A was amended by the Drug Quality and Security Act (DQSA)6 
to remove the advertising, promotion, and solicitation provisions. As a result, the May 2002 CPG 
is no longer relevant, and it is necessary to explain FDAs current thinking with regard to section 
503A.   
 
The Federal Register notice announcing the availability of the draft version of this guidance 
withdrew the May 2002 CPG as well as the November 1998 guidance for industry entitled 
Enforcement Policy During Implementation of Section 503A of the Federal Food, Drug, and 
Cosmetic Act.7     
 
 
III.  POLICY  
 
                                                 
3 Section 503A of the FD&C Act and this guidance do not apply to positron emission tomography (PET) drugs as 
defined in section 201(ii) of the FD&C Act or radiopharmaceuticals (see section 503A(e) of the FD&C Act).  
Section 503A(e) specifically states that section 503A does not apply to radiopharmaceuticals or to PET drugs as 
defined in section 201(ii).  PET drugs are subject to the current good manufacturing practice requirements of 21 
CFR part 212. Section 503A also does not apply to drugs intended for use in animals. The statutory and regulatory 
provisions governing the compounding of human drug products differ from those governing the compounding of 
animal drug products.  All relevant statutory and regulatory requirements relating to the compounding of animal 
drug products remain in effect, subject to the requirements of section 512 of the FD&C Act (21 U.S.C. 360b) and 21 
CFR part 530. 
4 See Thompson v. Western States Med. Ctr., 535 U.S. 357 (2002). 
5 See 67 FR 39,409 (June 7, 2002).   
6 See Pub. L. No. 113-54 (2013). 
7 78 FR 72,901 (Dec. 4, 2013). 
  2  Contains Nonbinding Recommendations 
 
A drug product intended for use in humans that is compounded in compliance with section 503A 
and its associated regulations is exempt from the requirements in sections 501(a)(2)(B), 
502(f)(1), and 505 of the FD&C Act.  However, all other applicable provisions of the FD&C Act 
remain in effect for compounded drugs, even if the conditions of section 503A are met.   
 
FDA expects state boards of pharmacy to continue their oversight and regulation of the practice 
of pharmacy, including pharmacy compounding.  FDA also intends to continue to cooperate with 
state authorities to address pharmacy activities that may be violative of the FD&C Act, including 
section 503A.  FDAs enforcement approach with respect to such violations is described in 
section IV.C., below.  
 
A.  Conditions of Section 503A 
 
Under section 503A of the FD&C Act, a compounded drug product is exempt from sections 
501(a)(2)(B), 502(f)(1), and 505 of the FD&C Act if it meets the conditions of section 503A of 
the FD&C Act.  Specifically, the compounded drug product qualifies for the exemptions if: 
 
1.  The drug product is compounded for an identified individual patient based on the receipt 
of a valid prescription order, or a notation, approved by the prescribing practitioner, on 
the prescription order that a compounded product is necessary for the identified patient 
(section 503A(a) of the FD&C Act). 
 
2.  The compounding of the drug product is performed:  
   
  By a licensed pharmacist in a state licensed pharmacy or a Federal facility, or by a 
licensed physician on the prescription order for an individual patient made by a 
licensed physician or other licensed practitioner authorized by state law to prescribe 
drugs; or 
  By a licensed pharmacist or licensed physician in limited quantities before the receipt 
of a valid prescription order for such individual patient and:  
  is based on a history of the licensed pharmacist or licensed physician receiving 
-
valid prescription orders for the compounding of the human drug product; and  
  those orders have been generated solely within an established relationship 
-
between the licensed pharmacist or licensed physician and either such patient for 
whom the prescription order will be provided or the physician or other licensed 
practitioner who will write such prescription order (sections 503A(a)(1) and (2) of 
the FD&C Act). 
 
3.  The drug product is compounded in compliance with the United States Pharmacopoeia 
(USP) chapters on pharmacy compounding8 using bulk drug substances, as defined in 21 
CFR 207.3(a)(4), that comply with the standards of an applicable USP or National 
Formulary (NF) monograph, if one exists.  
                                                 
8 After the Modernization Act was enacted in 1997, the USP moved its chapter on pharmacy compounding to 
chapter <795> and added chapter <797>, which specifically addresses sterile compounding and is referenced in 
chapter <795>. 
  3  Contains Nonbinding Recommendations 
 
 
If such a monograph does not exist, the drug substance(s) must be a component of an 
FDA-approved human drug product. If a monograph does not exist and the drug 
substance is not a component of an FDA-approved human drug product, it must appear 
on a list of bulk drug substances for use in compounding developed by FDA through 
regulation (section 503A(b)(1)(A)(i) of the FD&C Act).  See section III.B.2 below for the 
interim policy for this provision. 
 
4.  The drug product is compounded using bulk drug substances that are manufactured by an 
establishment that is registered under section 510 of the FD&C Act (including a foreign 
establishment that is registered under section 510(i) of the FD&C Act) (section 
503A(b)(1)(A)(ii) of the FD&C Act). 
 
5.  The drug product is compounded using bulk drug substances that are accompanied by 
valid certificates of analysis for each bulk drug substance (section 503A(b)(1)(A)(iii) of 
the FD&C Act).   
 
6.  The drug product is compounded using ingredients (other than bulk drug substances) that 
comply with the standards of an applicable USP or NF monograph, if one exists, and the 
USP chapters on pharmacy compounding9 (section 503A(b)(1)(B) of the FD&C Act). 
 
7.  The drug product does not appear on the list, published at 21 CFR 216.24, that includes 
drug products that have been withdrawn or removed from the market because such drug 
products or components of such drug products have been found to be unsafe or not 
effective (section 503A(b)(1)(C) of the FD&C Act).  See section III.B.1 below. 
 
8.  The licensed pharmacist or licensed physician does not compound regularly or in 
inordinate amounts any drug products that are essentially copies of commercially 
available drug products (section 503A(b)(1)(D) of the FD&C Act). 
 
9.  The drug product is not a drug product identified by FDA by regulation as a drug product 
that presents demonstrable difficulties for compounding that reasonably demonstrate an 
adverse effect on the safety or effectiveness of that drug product (section 503A(b)(3)(A) 
of the FD&C Act).  See section III.B.3 below. 
 
10. The drug product is compounded in a state that has entered into a memorandum of 
understanding (MOU) with FDA that addresses the distribution of inordinate amounts of 
compounded drug products interstate and provides for appropriate investigation by a state 
agency of complaints relating to compounded drug products distributed outside such 
state; or, in states that have not entered into such an MOU with FDA, the licensed 
pharmacist, licensed pharmacy, or licensed physician does not distribute, or cause to be 
distributed, compounded drug products out of the state in which they are compounded, 
more than 5% of the total prescription orders dispensed or distributed by such pharmacy 
                                                 
9 Id.   
  4  Contains Nonbinding Recommendations 
 
or physician (sections 503A(b)(3)(B)(i) & (ii) of the FD&C Act). See section III.B.4 
below for the interim policy for this provision. 
 
B.  Provisions of Section 503A That Require Regulations or Other FDA Actions 
 
Specific provisions of section 503A of the FD&C Act require rulemaking or other action by 
FDA.  FDAs policy related to these specific provisions is described below. 
 
1.  Withdrawn or Removed List 
 
FDA promulgated a final rule, codified at 21 CFR 216.24, which lists drug products that cannot 
be compounded because they have been withdrawn or removed from the market because the 
drug products or components of the drug products have been found to be unsafe or not effective.  
FDA intends to update this list periodically, and expects compounders to comply with the list 
as it currently exists and with any final updates.   
 
2.  Bulk Drug Substances List 
 
Section 503A(b)(1)(A)(i)(III) of the FD&C Act provides that a drug product can be compounded 
using bulk drug substances that do not have an applicable USP or NF monograph (section 
503A(b)(1)(A)(i)(I) of the FD&C Act) and are not components of FDA-approved drugs (section 
503A(b)(1)(A)(i)(II) of the FD&C Act) if the bulk drug substances appear on a list developed by 
FDA and issued through regulation.   
 
In the Federal Register of April 7, 1998 (63 FR 17,011), FDA invited all interested persons to 
nominate bulk drug substances for inclusion on the list.  In the Federal Register of January 7, 
1999 (64 FR 996), FDA published a proposed rule listing bulk drug substances that can be used 
in pharmacy compounding.  In the Federal Register of December 4, 2013 (78 FR 72,841), FDA 
published a notice withdrawing the 1999 proposed rule and inviting all interested persons to 
nominate bulk drug substances for inclusion on a list of bulk drug substances that can be used for 
compounding under section 503A of the FD&C Act.  FDAs interim policy concerning bulk drug 
substances that are not components of drugs approved under section 505 of the FD&C Act or 
that are not the subject of applicable USP or NF monographs can be found in the guidance, 
Interim Policy on Compounding Using Bulk Drug Substances Under Section 503A of the Federal 
Food, Drug and Cosmetic Act.  
 
3.  Demonstrable Difficulties for Compounding  
 
Under section 503A(b)(3)(A) of the FD&C Act, a compounded drug product would not qualify 
for the exemptions provided in subsection (a) if it is identified by FDA through regulation as a 
drug product that presents demonstrable difficulties for compounding that reasonably 
demonstrate an adverse effect on the safety or effectiveness of the drug product.  In the Federal 
Register of December 4, 2013 (78 FR 72,840), FDA published a notice inviting all interested 
persons to nominate drug products or categories of drug products for inclusion on a list of drug 
products that present demonstrable difficulties for compounding (difficult-to-compound list). 
This provision is not enforceable until FDA promulgates an implementing regulation.  
  5  Contains Nonbinding Recommendations 
 
 
4.  Memorandum of Understanding Between FDA and the States 
 
Section 503A(b)(3) of the FD&C Act states that FDA, in consultation with the National 
Association of Boards of Pharmacy (NABP) will develop a standard MOU for use between FDA 
and the states that will address the interstate distribution of inordinate amounts of compounded 
drug products and provide for appropriate investigation by a state agency of complaints relating 
to compounded drug products distributed outside that state.  On January 21, 1999, FDA 
published a notice in the Federal Register announcing the availability of a draft standard MOU, 
developed in consultation with the NABP.  This draft MOU was not finalized.  FDA intends to 
publish a new draft MOU for comment that will replace the January 1999 draft.   
 
Under section 503A(b)(3)(B)(ii), an individual or firm in a state that does not enter into an MOU 
with FDA that distributes, or causes to be distributed, compounded drug products out of the state 
in which they are compounded, can compound for interstate distribution outside the state only 
5% of the total prescription orders dispensed or distributed by the individual or firm.  FDA does 
not intend to enforce the 5% limit on interstate distribution until after FDA has finalized an 
MOU and made it available to the states for their consideration and signature.  The Federal 
Register notice that will announce the availability of the draft MOU will specify a time period 
during which the MOU will be made available to the states to sign.  After this time period 
expires, FDA intends to begin enforcing the 5% limit in states that have not signed the MOU. 
 
 
IV.  GUIDANCE ON REGULATORY ACTION 
 
A.  Requirements Applicable to Drug Products that Meet the Conditions of Section 
503A  
 
As stated above, a compounded drug product intended for use in humans that meets the 
conditions of section 503A of the FD&C Act and its associated regulations is exempt from the 
requirements under sections 501(a)(2)(B), 502(f)(1), and 505 of the FD&C Act.   
 
However, individuals and firms may be subject to a warning letter, seizure of product, injunction, 
and/or criminal prosecution for violations of other requirements of the FD&C Act.  Such 
violations may include, but are not limited to, the following:      
 
1.  The drug product must not consist in whole or in part of any filthy, putrid, or decomposed 
substance, or be prepared, packed, or held under insanitary conditions whereby it may 
have been contaminated with filth or whereby it may have been rendered injurious to 
health.  (Sections 501(a)(1) and (a)(2)(A) of the FD&C Act) 
 
2.  If the drug product purports to be a drug that is recognized in an official compendium, its 
strength must not differ from, and its quality or purity must not fall below, the standards 
set forth in the compendium, unless the difference is plainly stated on its label.  (Section 
501(b) of the FD&C Act) 
 
  6  Contains Nonbinding Recommendations 
 
3.  For a drug product not subject to section 501(b) of the FD&C Act, the drugs strength 
must not differ from, and its quality or purity must not fall below, that which it purports 
to have.  (Section 501(c) of the FD&C Act) 
 
4.  If the drug product purports to be a drug that is recognized in an official compendium, it 
must be packaged and labeled as prescribed in the compendium.  (Section 502(g) of the 
FD&C Act) 
 
5.  The drug products labeling, advertising, and promotion must not be false or misleading.  
(Sections 502(a), 502(bb),10 and 201(n) of the FD&C Act) 
 
B.  Enforcement Action When a Drug Does Not Meet the Conditions of Section 503A  
 
If FDA determines that an individual or firm compounds a drug product that does not meet the 
conditions of section 503A, then in addition to the violations listed above in section IV.A., the 
individual or firm that compounds the drug product may also be subject to a warning letter, 
seizure of product, injunction, and/or criminal prosecution for violations of sections 
501(a)(2)(B), 502(f)(1), and 505 of the FD&C Act.11 Such violations may include, but are not 
limited to, the following:  
 
1.  Producing Adulterated Drugs  
 
In accordance with section 501(a)(2)(B) of the FD&C Act and 21 CFR parts 210 and 211, the 
methods used in, and the facilities and controls used for, the manufacture, processing, packing, 
and holding of a drug must conform with current good manufacturing practice (CGMP) 
requirements.  If an individual or firm compounds any drug products that do not meet the 
conditions of section 503A of the FD&C Act, those drug products would be subject to CGMP 
requirements. 
  
2.  Producing Unapproved New Drugs   
 
In accordance with section 505(a) of the FD&C Act, an individual or firm must not introduce or 
deliver for introduction into interstate commerce any new drug unless an approved NDA or 
ANDA is in effect for that drug product. If an individual or firm compounds any drug products 
that do not meet the conditions of section 503A of the FD&C Act, those drug products would be 
subject to the new drug approval requirements.  
   
3.  Misbranded Drugs 
 
                                                 
10 Section 502(bb) was added to the FD&C Act by section 103(b) of the DQSA. 
11 See Medical Ctr. Pharm. v. Mukasey, 536 F.3d 383, 405 (5th Cir. 2008) (compounded drugs are in fact new 
drugs as defined by [21 U.S.C.]  321(p) but are exempt from the requirements of [21 U.S.C.]  351(a)(2)(B), 
352(f)(1), and 355 if and only if they comply with the conditions set forth in [21 U.S.C.]  353a.). 
  7  Contains Nonbinding Recommendations 
 
In accordance with section 502(f)(1) of the FD&C Act and 21 CFR part 201.5, drug products that 
are not labeled with adequate directions for use are misbranded.  If an individual or firm 
compounds any drug products that do not meet the conditions of section 503A of the FD&C Act, 
those drug products would be subject to the requirements for adequate directions for use. 
 
In addition to sections 501(a)(2)(B), 502(f)(1), and 505 of the FD&C Act, an individual or firm 
that compounds any drug products that do not meet the conditions of section 503A of the FD&C 
Act would be subject to the requirements listed in section IV.A, above, as well as other 
requirements of the FD&C Act and FDA regulations. 
 
C.  Enforcement Approach 
 
Generally, FDA expects to employ a risk-based enforcement approach with respect to violative 
compounded drugs, giving the highest enforcement priority to compounded drugs and violations 
of the FD&C Act and FDA regulations that pose the greatest public health risks.  However, FDA 
emphasizes that it need not identify a particular safety problem before pursuing enforcement 
action. 
 
  8