Guidance  
For Entities Considering 
Whether to Register As 
Outsourcing Facilities Under 
Section 503B 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) 
 
August 2015 
Compounding and Related Documents 
 
   
Guidance  
 For Entities Considering 
Whether to Register As 
Outsourcing Facilities Under 
Section 503B of the Federal 
Food, Drug, and Cosmetic Act  
 
 
 
 
Additional copies are available from: 
 
Office of Communications, Division of Drug Information  
Center for Drug Evaluation and Research 
Food and Drug Administration 
10001 New Hampshire Ave., Hillandale Bldg., 4th Floor  
Silver Spring, MD 20993-0002  
Phone: 855-543-3784 or 301-796-3400; Fax: 301-431-6353 
Email: druginfo@fda.hhs.gov  
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm 
 
 
 
 
 
 
 
 
U.S. Department of Health and Human Services 
Food and Drug Administration 
Center for Drug Evaluation and Research (CDER) 
 
August 2015 
Compounding and Related Documents 
 
  Contains Nonbinding Recommendations 
 
 
 
TABLE OF CONTENTS 
 
 
I.  INTRODUCTION............................................................................................................. 1 
II.  BACKGROUND ............................................................................................................... 2 
III.  GUIDANCE ....................................................................................................................... 4 
  Contains Nonbinding Recommendations 
 
1
Guidance  
For Entities Considering Whether to Register As Outsourcing 
Facilities Under Section 503B of the Federal Food, Drug, and 
Cosmetic Act 
 
This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on 
this topic.  It does not create any rights for any person and is not binding on FDA or the public.  You can 
use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.  To 
discuss an alternative approach, contact the FDA staff responsible for this guidance as listed on the title 
page.   
 
I.  INTRODUCTION  
 
This guidance is intended for entities considering whether to register with the Food and Drug 
Administration (FDA or Agency) as an outsourcing facility under section 503B of the Federal 
Food, Drug, and Cosmetic Act (FD&C Act).2   
 
FDA has received questions about whether entities engaged in various types of activities (e.g., a 
facility that is compounding only non-sterile drugs or only repackaging biological products) 
should register as an outsourcing facility.  Because entities that register as outsourcing facilities 
must pay a registration fee and FDA has determined that fees paid pursuant to sections 503B and 
744K of the FD&C Act will not be refunded, FDA is issuing this guidance to answer some of 
these questions and to provide potential registrants additional information about the regulatory 
impact of registering as an outsourcing facility. 
 
A separate FDA guidance document contains details on the process for registering as an 
outsourcing facility.3   
 
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 
                                                 
1 This guidance has been prepared by multiple offices in the Center for Drug Evaluation and Research (CDER) in 
cooperation with the Center for Biologics Evaluation and Research (CBER), the Center for Veterinary Medicine 
(CVM), and the Office of Regulatory Affairs (ORA) at the Food and Drug Administration. 
2 A new section 503B was added to the FD&C Act by the Drug Quality and Security Act (DQSA). See Pub. L. 
No.113-54,  102(a), 127 Stat. 587, 587-588 (2013). 
3 See the guidance for industry Registration of Human Drug Compounding Outsourcing Facilities Under Section 
503B of the FD&C Act.  
All FDA guidances are available on the FDA guidance Webpage at 
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm. FDA updates 
guidances regularly.  To ensure that you have the most recent version, please check this web page. 
  1  Contains Nonbinding Recommendations 
 
the word should in Agency guidances means that something is suggested or recommended, but 
not required.  
 
II.  BACKGROUND 
 
The Drug Quality and Security Act, signed into law on November 27, 2013, creates a new 
section 503B of the FD&C Act.  Section 503B(d)(4) defines an outsourcing facility as  
 
a facility at one geographic location or address that (i) is engaged in the 
compounding of sterile drugs; (ii) has elected to register as an outsourcing 
facility; and (iii) complies with all of the requirements of this section. 
Section 503B(d)(4) further states that an outsourcing facility is not required to be a licensed 
pharmacy and may or may not obtain prescriptions for identified individual patients.4  Section 
503B(d)(5) defines sterile drug as a drug that is intended for parenteral administration, an 
ophthalmic or oral inhalation drug in aqueous format, or a drug that is required to be sterile under 
Federal or State law. 
A human drug product compounded by or under the direct supervision of a licensed pharmacist 
in a registered outsourcing facility can qualify for exemptions from the drug approval 
requirements in section 505 of the FD&C Act (21 U.S.C. 355), the requirement to be labeled 
with adequate directions for use in section 502(f)(1) of the FD&C Act (21 U.S.C. 352(f)(1)), and 
the track and trace requirements in section 582 of the FD&C Act (21 U.S.C. 360eee-1).  
However to qualify, each of the following conditions must be met.5   
1.  The outsourcing facility must be in compliance with the registration and reporting 
requirements of section 503B(b).  This includes submitting twice yearly reports regarding 
the drugs compounded by the outsourcing facility and submitting adverse event reports in 
accordance with section 503B(b)(5).6,7  
2.  If the outsourcing facility compounds drugs using one or more bulk drug substances, the 
bulk drug substances must meet certain requirements.8  
3.  If the outsourcing facility compounds using ingredients other than bulk drug substances, 
those ingredients must meet certain requirements.9  
                                                 
4 Although an outsourcing facility may send prescription drugs to healthcare facilities without obtaining 
prescriptions for identified individual patients, drugs produced by outsourcing facilities remain subject to the 
requirements in section 503(b) of the FD&C Act.  Therefore, an outsourcing facility cannot dispense a prescription 
drug to a patient without a prescription. 
5 FDA has issued separate guidance documents addressing some of these conditions of section 503B in more detail 
(e.g., registration, reporting, and fees), and FDA intends to publish additional guidance addressing other conditions. 
6 See section 301(ccc)(3) of the FD&C Act, which makes it a prohibited act for an entity that is registered in 
accordance with section 503B(b) to fail to report drugs or adverse events as required. 
7 See sections 503B(a)(1) and (b). 
8 See section 503B(a)(2). 
9 See section 503B(a)(3). 
  2  Contains Nonbinding Recommendations 
 
4.  The outsourcing facility must not compound drugs that appear on a list published by FDA 
of drugs that have been withdrawn or removed from the market because the drugs or 
components of such drugs have been found to be unsafe or not effective.10,11 
5.  The outsourcing facility must not compound drugs that are essentially a copy of one or 
more approved drugs.12  
6.  The outsourcing facility must not compound drugs that appear on a list published by FDA 
of drugs that present demonstrable difficulties for compounding.13 
7.  If the outsourcing facility compounds from a drug that is the subject of a risk evaluation 
and mitigation strategy (REMS) approved with elements to assure safe use pursuant to 
section 505-1, or from a bulk drug substance that is a component of such drug, the 
outsourcing facility must demonstrate to FDA before beginning to compound that it will 
use controls comparable to the controls applicable under the REMS.14  
8.  The outsourcing facilitys compounded drugs will not be sold or transferred by an entity 
other than that outsourcing facility.15  
9.  The outsourcing facility has paid all applicable establishment and reinspection fees owed 
under section 744(k).16,17 
10. The outsourcing facility must include on the labels and labeling of its compounded drug 
products the information required under section 503B(a)(10).18  
11. The outsourcing facility must compound all drugs in accordance with section 503B.19  
 
Because drugs compounded by outsourcing facilities are not exempt from section 501(a)(2)(B) 
of the FD&C Act, outsourcing facilities are subject to current good manufacturing practice 
                                                 
10 See section 503B(a)(4). 
11 The list of drugs that have been withdrawn or removed from the market because such drugs or components of 
such drugs have been found to be unsafe or not effective (the withdrawn-or-removed list) can be found at 21 CFR 
216.24.  On July 2, 2014, FDA published a proposed rule that would update that list (Additions and Modifications to 
the List of Drug Products That Have Been Withdrawn or Removed from the Market for Reasons of Safety or 
Effectiveness,  79 FR 37,687).  In the preamble to the proposed rule, FDA explained that FDA is proposing to revise 
and update the withdrawn-or-removed list at 21 CFR 216.24 for purposes of both sections 503A and 503B.  Until 
the final rule revising and updating the withdrawn-or-removed list is published, drugs included on the existing list at 
21 CFR 216.24 may not be compounded under section 503B. 
12 See section 503B(a)(5). 
13 See section 503B(a)(6). 
14 See section 503B(a)(7). 
15 See section 503B(a)(8). 
16 See section 503B(a)(9). 
17 See also sections 744J and 744K of the FD&C Act, and guidance for industry Fees for Human Drug 
Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act.   
18 See section 503B(a)(10). 
19 See section 503B(a)(11). 
  3  Contains Nonbinding Recommendations 
 
(CGMP) requirements, among other requirements under the FD&C Act.20,21  In addition, 
outsourcing facilities will be inspected by FDA on a risk-based schedule.22 
III.  GUIDANCE  
If you register a facility as an outsourcing facility, you are indicating your intent for the facilitys 
compounded drugs to be regulated under section 503B of the FD&C Act.  Under section 
503B(a)(11), a compounded drug can qualify for the exemptions from sections 502(f)(1), 505, 
and 582 of the FD&C Act only if all of the facilitys compounded drugs are compounded in 
accordance with section 503B.  As stated above, drugs compounded in accordance with section 
503B are not exempt from CGMP requirements, and outsourcing facilities will be inspected by 
FDA on a risk-based schedule.  
 
If you do not intend for all drugs compounded at your facility to be compounded in accordance 
with section 503B and comply with CGMP requirements, you should not register as an 
outsourcing facility under section 503B. 23   In addition, entities considering registering as 
outsourcing facilities should consider the following: 
 
  To meet the definition of an outsourcing facility, the facility must be engaged in the 
compounding24 of sterile human drugs.25   
  The definition of compounding in section 503B(d)(1) does not include repackaging. 
  For purposes of section 503B, a drug, including a sterile drug, does not include a 
biological product subject to licensure under section 351 of the Public Health Service Act 
(PHS Act), or an animal drug subject to approval under section 512 of the FD&C Act.26 
 
Therefore, you should not register a facility as an outsourcing facility if the only activities 
conducted at the facility are repackaging, compounding non-sterile drugs, compounding  animal 
drugs, or mixing, diluting, or repackaging biological products subject to licensure under section 
351 of the PHS Act, because none of the products produced at the facility would qualify for the 
exemptions provided in section 503B.   
 
                                                 
20 FDA has issued a draft guidance for industry Current Good Manufacturing PracticeInterim Guidance for 
Human Drug Compounding Outsourcing Facilities Under Section 503B of the FD&C Act.  Once finalized, that 
guidance will represent the Agencys thinking on this topic.  
21 See section 503B(a). 
22  See section 503B(b)(4). 
23 If an entity is not registered as an outsourcing facility under section 503B, its drugs could qualify for the 
exemptions from sections 505, 502(f)(1), and 501(a)(2)(B) of the FD&C Act, if they meet all of the conditions of 
section 503A. Otherwise, the drugs would be subject to all of the requirements in the FD&C Act applicable to drugs 
made by conventional manufacturers. 
24 Section 503B(d)(1) defines the term compounding, for purposes of that section, to include the combining, 
admixing, mixing, diluting, pooling, reconstituting, or otherwise altering of a drug or bulk drug substance to create a 
drug. 
25 See section 503B(d)(4). 
26 In addition, for purposes of section 503A of the FD&C Act, the term drug does not include a biological product 
subject to licensure under section 351 of the PHS Act.  
  4  Contains Nonbinding Recommendations 
 
In addition, by registering as an outsourcing facility, an entity is electing to have its compounded 
drugs regulated under section 503B of the FD&C Act, not section 503A. Drugs compounded at 
an outsourcing facility are not eligible for the exemptions provided in section 503A, even if the 
conditions in that section are met with respect to the particular drug. 
 
If a facility compounds sterile human drugs and otherwise meets the definition of an outsourcing 
facility, any non-sterile human drugs compounded by the facility would also be eligible for the 
exemptions from sections 505, 502(f)(1), and 582 if the drugs are compounded in accordance 
with the provisions of section 503B.  
 
FDA has issued draft guidances on (1) mixing, diluting, and repackaging biological products 
outside the scope of an approved biologics license application (BLA); (2) repackaging certain 
human drug products by pharmacies and outsourcing facilities; and (3) compounding animal 
drug products from bulk drug substances.  Once finalized, these guidance documents will 
describe FDAs compliance policies with respect to outsourcing facilities that mix, dilute, or 
repackage biological products outside the scope of an approved BLA, repackage human drug 
products, and compound animal drug products from bulk drug substances27. 
                                                 
27 See the draft guidances for industry, Mixing, Diluting, or Repackaging Biological Products Outside the Scope of 
an Approved Biologics License Application; Repackaging of Certain Human Drug Products by Pharmacies and 
Outsourcing Facilities; and Compounding Animal Drugs from Bulk Drug Substances. 
  5