Prescription Requirement Under 


Section 503A of the Federal 


Food, Drug, and Cosmetic Act  
 
Guidance for Industry
   
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.  Department of Health and Human Services
  
Food and Drug  Administration 
 
Center for Drug Evaluation and Research (CDER)
  
Office of Compliance/OUDLC 
 
 
 
December 2016 

Compounding and Related Documents 
 
 
   
 
  

Prescription Requirement Under 


Section 503A of the Federal 


Food, Drug, and Cosmetic Act 
 
 
Guidance for Industry 
 
 
 
 
 
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)
  
Office of Compliance/OUDLC 
 
 
December 2016 

Compounding and Related Documents 
 
 
  Contains Nonbinding Recommendations  
 
TABLE OF CONTENTS  
 
 
 
I.   INTRODUCTION AND SCOPE ..................................................................................... 1 
 
II.   BACKGROUND  ............................................................................................................... 2 
 
A.   Overview  .........................................................................................................................................  2
  
B.   The Prescription Requirement in Section 503A(a) of the FD&C Act  .......................................  5
  
III.   POLICY ............................................................................................................................. 7 
 
A.   Receipt of a Valid Prescription Order or a Notation Approved by the Prescriber Under 

Section 503A ............................................................................................................................................  7
  
B.   When a Drug Can  Be Compounded Under Section 503A ..........................................................  8
  
C.   When a Compounded Drug Product Can Be Distributed Under Section 503A .....................  10 
 
D.   Compounding Office Stock/ Compounding for Office Use ...................................................... 10 
 
 
  Contains Nonbinding Recommendations 
Prescription Requirement Under Section 503A of the 
Federal Food, Drug, and Cosmetic Act 
1 
Guidance for lndustry
This guidance represents the cunent thinking of the Food and Drng Administration (FDA or Agency) on 
this topic.  It does not establish 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 AND SCOPE 
This guidance sets fo1th the FDA's policy concerning ce1tain prescription requirements for 
compounding human drng products2 for identified individual patients under section 503A of the 
Federal Food, Drng, and Cosmetic Act (FD&C Act or Act).  It addresses compounding after the 
receipt of a prescription for an identified individual patient, compounding before the receipt of a 
prescription for an identified individual patient (anticipatory compounding), and compounding 
for office use (or office stock). 
In general, FDA's guidance documents do not establish legally enforceable responsibilities. 
Instead, guidances describe the Agency's cmTent thinking on a topic and should be viewed only 
as recommendations, unless specific regulat01y or statuto1y requirements are cited.  The use of 
the word should in Agency guidances means that something is suggested or recommended, but 
not required. 
1 TI1is guidance has been prepared by multiple offices in the Center for Dmg Evaluation and Research (CDER), in 
consultation with the Office of Regulatory Affairs at the Food and Dmg Administration. 
2 TI1is guidance does not apply to diugs compounded for use in animals, to biological products subject to licenswe 
in a biologics license application, or to repackaged diug products. For proposed policies pertaining to compow1ding 
diug products from bulk dmg substances for use in animals, see FDA's diaft guidance, Compounding Animal DnJgs 
from Bulk Drug Substances. For proposed policies pe1taining to mixing, diluting, and repackaging biological 
products, see FDA's diaft guidance, Mixing, Diluting, and Repackaging Biological Products Outside the Scope of 
an Approved Biologics License Application. For proposed policies pertaining to repackaged di11g products, see 
FDA' s diaft guidance, Repackaging of Certain Human Drug Products by Pharmacies and Outsourcing Facilities. 
FDA guidances are available on the FDA website at 
http ://www fda.g ov/Regulato1ylnformation/Guidances/ default htm.  Contains Nonbinding Recommendations  
 
II.   BACKGROUND  
 
A.   Overview   
 
1. 	  Compounding Under  the FD&C Act  
 
Sections 503A and 503B of the FD&C Act address human drug compounding.   
 
Section 503A, added to the FD&C Act  by the Food and Drug Administration Modernization Act  
in 1997, describes  the conditions  that  must be satisfied for human drug products compounded by 
a licensed pharmacist in a State licensed pharmacy or Federal facility, or  by a licensed physician, 
to be exempt from the following three sections of the FD&C Act:  
  
	   section 501(a)(2)(B) (concerning current good manufacturing practice  (CGMP)
  
requirements);
   
	   section 502(f)(1) (concerning the  labeling of drugs with adequate directions for use); and  
	   section 505 (concerning the approval of drugs under new drug applications (NDAs) or 
abbreviated new  drug applications (ANDAs)).   
 
 A list of the conditions that must be met for a compounded drug product  to qualify for the  
exemptions in section 503A of the FD&C Act appears in the  guidance, Pharmacy Compounding 
of Human Drug Products Under Section 503A of  the Federal  Food, Drug, and Cosmetic  Act.  
 
New section 503B, added to the FD&C Act by the Drug Quality and Security Act in 2013, 
created a new category of compounders called outsourcing facilities. Section 503B  of the FD&C  
Act describes the conditions that must be satisfied for human drug products compounded by or  
under the direct supervision of a licensed pharmacist in an outsourcing facility to qualify for  
exemptions  from three sections of the FD&C Act:  
 
 	  section 502(f)(1);   
 	  section 505; and  
 	  section 582 (concerning  drug supply chain security requirements).   
 
In contrast  to drug products compounded under section 503A of the FD&C Act, drug products  
compounded by outsourcing facilities under section 503B  are not exempt from CGMP  
requirements in section  501(a)(2)(B).  Outsourcing facilities are also subject to FDA inspections 
according to a risk-based schedule, specific adverse event reporting  requirements, and other  
conditions that help to mitigate the  risks of the  drug products they compound.   
 
The guidance, For Entities Considering Whether  to Register  As Outsourcing Facilities Under  
Section 503B of the Federal Food, Drug, and Cosmetic  Act,  lists  the conditions that are  set forth  
in section 503B of the FD&C Act.  
 
2. 	  Compounding, Generally  
 
  2  
    Contains Nonbinding Recommendations  
 
Compounded drug products  can serve an important role for  patients whose clinical needs cannot  
be met by an FDA-approved drug product, such as a patient  who has an allergy and needs a  
medication to be made without  a certain dye, or  an  elderly patient or a child who cannot swallow  
a tablet  or capsule and needs a medicine in  a liquid  dosage  form that is not otherwise available, 
or for appropriate pediatric or weight-based dosing.  Drug products for identified individual 
patients can be compounded consistent with section 503A by licensed pharmacists in State  
licensed pharmacies and Federal facilities, or by  licensed physicians.  Drug products can also be  
compounded by outsourcing facilities under section 503B of the FD&C Act.   
 
In general, when a compounded drug product  is  clinically necessary for a patient, a  prescriber  
writes a prescription for  a compounded drug product, and the patient brings the prescription to  a  
pharmacy, where a licensed pharmacist  fills the prescription.   In an inpatient setting, such as in a  
hospital, a prescriber may write  an order for a compounded drug product  on a patients health 
record (e.g., chart).  In an office setting, a physician may make an entry or  order  in a  patients  
health record that  the physician compounded a drug in the office for administration to his or her  
patient after  the patient presents at  the physicians office with a clinical need for the compounded  
drug. 
 
In other  cases, based on a history of receiving  prescriptions for identified individual patients, in  
the context  of an established relationship with the patient or the practitioner who writes the  
prescription, a pharmacist may compound a drug product before receipt of a prescription for an 
identified individual patient in anticipation of receiving such a prescription.  The pharmacist then 
provides  the drug product to a patient or a prescriber upon receipt of a prescription.  Similarly, 
based on the amount of the compounded drug that the physician has historically administered or 
dispensed  to his or her patients, a physician may compound a drug product to hold in his or her  
office in anticipation of patients in his or her practice presenting with a need for the compounded 
drug,.  The physician then administers or dispenses the compounded drug to his or her patients  
after making an entry in  the patients health records.  
 
Sometimes,  it is  necessary for health  care practitioners in hospitals, clinics,  offices, or other  
settings to have certain  compounded drug products on hand that they  can  administer to a patient  
who presents  with  an immediate need for the compounded drug product.  For example, if a  
patient presents  at  an ophthalmologists office with a fungal eye infection, timely administration 
of a compounded antifungal medication may be critical to preventing vision loss.  In such a case,  
the ophthalmologist  may need to inject  the  patient with a compounded drug product  
immediately, rather than  writing  a prescription and waiting for the drug product to be  
compounded and shipped to the prescriber.3    
 
In other  cases, compounded drug products  may  need to be administered  by a health care 
practitioner  in his or her office because it would not be safe for the patient to take the  drug home  
for self-administration, and it would be more convenient  for  the physician to have the  drug in his  
                                                 
3  Such compounding  would be  subject  to all  of  the  conditions  of  section 503A or  503B,  including provisions  
concerning compounding drug products  that  are  essentially  copies  of  commercially  available  drug  products  (section  
503A(b)(1)(D))  or  drug products  that  are essentially  copies  of  approved  drugs  (section  503B(a)(5)).  
  3  
    Contains Nonbinding Recommendations  
 
or her office to administer immediately upon diagnosis, rather than asking the physician to order  
the drug and have the patient  return to the health  care practitioner for administration.   
 
3.   Risks Associated with Compounded Drug Products  
 
Although compounded drugs can serve an important need, they pose a higher risk to patients  
than FDA-approved drugs.  Compounded drug products are  not FDA-approved, which means  
they have not undergone  FDA premarket review for safety, effectiveness, and quality.  In  
addition, licensed pharmacists and licensed physicians who compound drug products  in 
accordance  with section 503A are not  subject to  CGMP  requirements.  Furthermore, FDA  does  
not interact with  the vast  majority of  licensed pharmacists  and licensed physicians who 
compound drug products and seek to  qualify for the exemptions under section 503A of the  
FD&C Act for the drug products  they compound  (see section  3, below)  because these  
compounders are not  licensed by FDA and generally do not register  their compounding  facilities  
with  FDA.  Therefore, FDA is often not  aware of potential problems  with their compounded 
drug products or compounding practices  unless it  receives  a complaint such as a report of a 
serious adverse event or  visible contamination.   
 
In 2012, contaminated injectable drug products  that a compounding pharmacy shipped to 
patients and health  care practitioners across the country  caused a fungal meningitis outbreak that  
resulted in more than 60 deaths and 750 cases of infection.4  This was the  most serious of a long 
history of outbreaks associated with contaminated compounded drugs.  Since the  2012 fungal  
meningitis outbreak, FDA has investigated numerous other  outbreaks and other serious adverse 
events, including deaths, associated with compounded drugs that were contaminated or otherwise  
compounded improperly.  For example, patients have been hospitalized  after receiving  
compounded non-sterile drugs that  were hundreds or even thousands of times their  labeled 
strength.5  
 
FDA has also identified  many pharmacies that  compounded drug products under insanitary 
conditions whereby the drug products may have been contaminated with filth or rendered 
injurious to health, and that shipped, sometimes in  large amounts, the  compounded drug products  
made under these conditions to patients and health  care providers  across the country.6  The  
longer a  compounded sterile drug product  that has been contaminated is held by a pharmacist or  
physician before  distribution,  7 or  held in inventory in a health  care facility before administration,  
the  greater the likelihood of  microbial proliferation and increased patient harm.  Because of these 
and other  risks, the FD&C Act places conditions  on compounding that must be met for  
compounded drugs to qualify for the exemptions in section 503A.  These conditions  include:  
                                                 
4  See http://www.cdc.gov/HAI/outbreaks/meningitis.html.  
 
5  See, for  example,  http://www fda.gov/Drugs/DrugSafety/ucm474552 htm  
 
6  See  FDA  actions,  including  warning  letters  and  injunctions,  related  to  insanitary  conditions  at  compounding  
facilities,  on  FDAs  website  at  
http://www fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm339771 htm  
 
7  Distribution  means  that  the  compounded drug  has  left  the  facility  in  which  it  was  compounded.   As  used  in  this  
guidance,  distribution  includes  dispensing a  drug directly  to a  patient.  
  4  
    Contains Nonbinding Recommendations  
 
 
	   compounding is for an identified individual patient,  
	   drugs compounded in advance of receiving prescriptions are compounded only in limited 
quantities, and  
	   drugs  are distributed pursuant to a  valid patient-specific prescription.   
 
These conditions  are  meant  to help ensure that compounding under section 503A is based on 
individual patient needs, and that  entities purportedly operating under section 503A are not  
actually  operating as conventional manufacturers. 
 
B.   The  Prescription Requirement  in Section 503A(a) of  the FD&C Act  
 
A compounded drug product may be eligible for  the exemptions under section 503A  of the  
FD&C Act  only if it is, among other things, 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.  To qualify for the exemptions under section 503A, the drug product must  also be  
compounded by a licensed pharmacist in a State  licensed pharmacy or a Federal facility, or by a 
licensed physician (section 503A(a)). 
 
Section 503A(a)  describes  two situations in  which a drug product can be  compounded: (1) based 
on the receipt of a valid prescription order for an identified individual patient (section 
503A(a)(1)); or  (2) in limited quantities before the receipt of a  valid prescription order for an 
identified individual patient  (section 503A(a)(2)).  As  discussed further  in section III.C of this  
guidance document, section 503A does not provide for distributing a compounded drug product  
before receiving a valid prescription order  for  an identified individual patient.  
 
The  prescription requirement under section 503A is a critical mechanism to distinguish 
compounding by a licensed pharmacist or licensed physician from conventional manufacturing, 
and to ensure that drug products compounded under section 503A, which are not FDA-approved, 
are not subject to  the requirement that  labeling bear adequate  directions for use, and are  not  
subject to  CGMP requirements, are provided to a patient only based on individual patient need.   
 
The prescription requirement is also an important factor that distinguishes  compounding by a  
licensed pharmacist in a State  licensed pharmacy or  a Federal facility, or  by a  licensed physician 
under section 503A from compounding by an outsourcing facility under section 503B of the  
FD&C Act.  Section 503B states  that an outsourcing facility may or  may not obtain prescriptions  
for identified individual patients (section 503B(d)(4)(C)).  Outsourcing facilities, which are 
subject to CGMP requirements and other  important conditions, can compound drug products  to 
fulfill the needs described in section II.A.2 for health care practitioners to have drug products on 
hand that  are not compounded for identified individual patients.   
 
1.	   Compounding After  Receipt of a Valid  Prescription Order  
 
As described in section II.A.2, a prescriber may write a prescription for an identified individual 
patient who needs a compounded drug product.  In  most cases, either the prescriber or the patient 
  5  
    Contains Nonbinding Recommendations  
 
will then bring or send the prescription to the pharmacy, where the pharmacist  will compound 
the drug product for the  patient and provide  it to the prescriber or patient  according to the  
prescription.   For a patient in an  inpatient setting, a prescriber  may place an order in  the patients  
health record  (e.g., chart) for a compounded drug product, which will likely be provided by the  
health  care facility pharmacy.  In an office setting, a physician may compound a drug after  
making a notation in the  health record  of a patient in his practice who presents with a need for  
the compounded medication.  These  types of compounding are  covered under  section 503A(a)(1) 
of the FD&C Act,8 which provides for compounding by a licensed pharmacist in a State  licensed  
pharmacy or a Federal facility, or  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.   
 
2.	   Compounding Before Receipt of a Valid Prescription Order  
 
Sometimes,  based on a history of  receiving prescriptions for a particular  drug product to be  
compounded for an identified individual patient, and in the  context of an established relationship 
with a particular prescriber or patient, a  pharmacist or physician will compound a batch of drugs  
in anticipation of receiving another  patient-specific prescription.  The compounder then provides  
the  drugs to a  patient  or health  care provider when a prescription for an identified individual  
patient  is received.  This  is known as  anticipatory compounding. Section 503A(a)(2) of  the  
FD&C Act provides for  compounding by a licensed pharmacist or licensed physician in limited  
quantities before the receipt of a valid prescription order for such individual patient if:  
 
   The compounding 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 
 
	   The  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.   
 
Anticipatory compounding can be beneficial because  larger batch sizes can increase efficiency  
and reduce  the likelihood of human error  that  is associated with compounding many small  
batches of a  drug product  after the receipt of individual prescriptions for the same drug.  
However, anticipatory compounding also has risks.  For example, if a problem occurs during 
compounding, such as contaminating  a drug product that is  supposed to be  sterile, or producing 
subpotent or  superpotent sterile or non-sterile drugs, it could  affect numerous patients, and not  
just one.  Because drug products compounded in accordance  with section 503A are exempt from  
CGMP requirements, there is an inherently greater chance of a production  mistake or  
                                                 
8  If  applicable state and  federal  requirements  are met,  outsourcing  facilities  can  also  compound  drug  products  
pursuant  to prescriptions  for  identified individual  patients  under  section 503B  of  the  FD&C  Act.   However,  that  is  
not  the  subject  of  this  guidance  document.  
  6  
    Contains Nonbinding Recommendations  
 
contamination.  Restricting  anticipatory compounding to limited quantities serves to  limit the  
number of patients likely to be affected  if there are drug product mix-ups or contamination.   
 
The limitations on anticipatory compounding in section 503A (i.e., compounding must be in 
limited quantities and  based on an  established relationship) help to protect patients from  
product quality issues.   
 
These limitations on anticipatory compounding also help to distinguish licensed  pharmacists or  
licensed physicians compounding drug products  under section 503A  for individual patients from  
conventional manufacturers, who generally  produce  larger  quantities of drugs  that are distributed  
without a prescription.  
 
The anticipatory compounding limitations also differentiate  licensed pharmacists and licensed 
physicians compounding under section 503A from  compounders registered as outsourcing  
facilities under section 503B of the FD&C Act.  As explained above, outsourcing facilities are  
subject to increased Federal oversight and quality standards, including CGMP requirements, 
which reduce the risks of quality problems such as production mistakes or contamination.  Under  
section 503B, an outsourcing facility can distribute compounded drug products to health care  
facilities and  health  care  practitioners without first receiving  prescriptions for identified  
individual patients.  
 
With these principles  in  mind, FDA  sets forth  its policy with  regard  to the prescription  
requirement in section 503A. 
 
III.   POLICY  
     
A.   Receipt of  a Valid Prescription Order or a Notation Approved by the  Prescriber 
Under Section 503A  
 
For  purposes of section 503A(a), a  valid prescription order for a compounded drug product  
means a valid prescription order from a licensed physician or  other  licensed practitioner  
authorized by state law to prescribe drugs (prescriber).  It also includes a  valid order or notation 
made  by a prescriber  in a patients health record (e.g., chart)  in an inpatient setting, and a valid 
order or notation by a physician who compounds a drug for  his or her own patient documented in 
that patients  health record.9    
 
To meet the  prescription requirement, a prescription must identify the patient for whom the drug 
has been prescribed.  If the identity of the patient is not given  or is not clear, it will not satisfy  
                                                 
9  Prescription orders  that  are  not  valid  would not  satisfy  the  prescription requirement  in section 503A  and  cannot 
serve as  the  basis  for  anticipatory  compounding.   See,  in  addition,  section 301(ccc)(2),  which states  that,  with  
respect  to a  drug to  be  compounded pursuant  to section 503A  or  503B,  the  intentional  falsification of  a  prescription,  
as applicable,  is  a  prohibited act.  
 
  7  
    Contains Nonbinding Recommendations  
 
this requirement.  For example, a prescription would not satisfy the requirement if it is written  
for the prescriber, when the prescriber is not  also the patient.10  
 
B.   When a Drug  Can  Be Compounded Under Section 503A  
 
1.   Compounding After  Receipt of a Valid  Prescription Order  
 
Unless a drug product  is  compounded in limited quantities before the receipt of a valid  
prescription order under  the conditions described in section 503A(a)(2) of the FD&C Act, which 
are also described  in section III.B.2 of this guidance, to qualify for the exemptions under section 
503A, the drug product  must be compounded after  the licensed pharmacist or licensed physician  
receives a valid prescription order for an individual patient.  We understand this to be  
compounding on the  receipt of a valid prescription order, as provided in section 503A(a)(1).11  
 
2.   Compounding Before Receipt of a Valid Prescription Order   
 
If a drug product is  not  compounded after the  receipt of a valid prescription order for an 
identified individual patient as described in section 503A(a)(1) of the FD&C Act and section 
III.B.1 of this guidance, the drug product can be  compounded under  section  503A of the Act by a  
licensed pharmacist or licensed physician  in limited quantities  before the receipt of a valid  
prescription order for such individual  patient (section 503A(a)(2)(A)), if all of the conditions of  
section 503A are met, including the following conditions:  
 
-  The compounding 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 
 
-  The 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 prescriber who will  write such prescription 
order12  (see section 503A(a)(2)(B)).  
 
This means that anticipatory compounding under section 503A  is done  in limited  quantities,  
based on an expectation that the  licensed pharmacist or licensed physician  will receive a patient-
specific prescription  for  the  particular drug product, written for a patient or  by a prescriber  with  
whom the compounder has a relationship.  
 
                                                 
10  In addition,  for  a  notation  to serve  as  a  basis  for  compounding under  section  503A,  the  notation must  document  
the  prescribers  determination that  a  compounded drug is  necessary  for  the  identified  patient  (section 503A(a)).   
FDA  intends  to  describe  its  policies  regarding  this  provision  in a future  policy  document.   
 
11  This  includes  a  physician compounding a  drug for his  or  her  own patient  after  writing a  prescription order  (e.g.,  an 
order  written in the  patients  chart)  for  the  compounded drug.  
 
12  When  a  physician compounds  drugs  for  his  or  her  own patients,  FDA  considers  the  established relationship  
provision  of  section 503A(a)(2)  to have  been  satisfied because  the  licensed physician  and the  prescriber  who will  
write  such prescription order  are  the  same  individual.  
 
  8  
    Contains Nonbinding Recommendations  
 
At  this time, as an interim compliance policy,  we  do not intend to consider  whether a  
compounder  has exceeded the limited quantity13 condition in section 503A(a)(2)  if:  
 
 	  The compounder holds for distribution14 no more than a 30-day supply of a particular  
compounded drug product (i.e., units of a compounded drug product  that the compounder  
believes it will distribute  over a  30-day period)  to fill valid prescriptions it has  not yet 
received; and   
 
	   The  amount  of the supply of a particular compounded product  is based on the number of  
valid prescriptions  that  the compounder has received for  identified individual patients  in a  
30-day period over the past year that  the compounder selected.   
 
Under this policy, if a compounder does not exceed the quantities described above, FDA does  
not intend to  determine whether anticipatory compounding was based on the  expectation that the  
compounder would receive another prescription for the drug product for  the same patient or from 
the same prescriber with whom the compounder has a history.  FDA  also  contemplates that a 
compounded drug product might be distributed to any patient or prescriber who presents a valid 
prescription for an identified individual patient for the compounded drug product.15  
 
The following examples  illustrate  FDAs policy on anticipatory compounding under  section  
503A(a)(2):  
 
 	  A compounder  regularly  receives valid prescription orders from a particular 
prescriber or prescribers, or for a  particular patient or patients,  for  compounded drug 
X.  The highest number of units of drug X for which the  compounder has received 
valid patient-specific  prescriptions  in a 30-day period in the last year  is 500 units.  
Compounding up to 500 units of drug X in advance of receiving prescriptions for  the  
drug, and holding no more than that  amount to fill new valid patient-specific 
prescriptions as the compounder receives  them, would be consistent with this  
policy.16      
 
 	  A compounder regularly receives valid  prescription orders from a particular 
prescriber or prescribers, or for a particular patient or patients,  for  compounded drug 
                                                 
13  The limited  quantities  policy,  which relates  to the  amount  of  inventory  held by  the  compounder,  does  not  alter  the  
products  BUD.  For  example,  if  the  BUD  for  the  product  is  9 days,  the  compounder  should not  produce  more  units  
than can be distributed pursuant  to valid prescriptions  and  used within  9  days.  
 
14  A drug product  for  distribution  does  not  include  drug  product  that  is  being  held pending  receipt  of  the  results  of  
release testing  such  as  sterility  testing.  
 
15  For  example,  in an inpatient  setting,  the  established relationship  may  be  between the  prescriber  who writes  an 
order  for  a  compounded  drug product  in a  patients  health  record,  and the  compounder  who produces  the  drug 
product.  
 
16   In this  example,  it  would  be  consistent  with  FDAs  policy  if,  after  distributing  200  units  of  drug  X  pursuant  to  
valid  patient-specific  prescriptions,  the  compounder  produces  up to 200 additional  units  of  drug X so that  the  total  
number  of  units  that  the  compounder  is  holding  for  distribution returns  to  500  units.    
  9  
    Contains Nonbinding Recommendations  
 
X.  As of  August 1, 2016, the highest number of  units of drug X for which the  
compounder has received such valid patient-specific prescriptions in a 30-day period 
between August 1, 2015, and August 1, 2016, is  500 units, which  were received  
between July 1, 2016, and July 30, 2016.  Based on this 30-day reference period, the  
compounder produces 500 units of drug X in advance of receiving prescriptions for  
the drug, and holds no more than that amount to fill new patient-specific prescriptions 
as the compounder receives them.  However, between July 15, 2016, and August 15, 
2016, the compounder receives valid patient-specific prescriptions for 750 units of  
compounded drug X.  Therefore, based on this new reference period, on August 16, 
2016, the compounder produces up to 750 units  of drug X in advance of receiving 
prescriptions for the drug, and holds  no more than that amount to fill new valid 
patient-specific prescriptions as the compounder receives them.  This would be  
consistent with FDAs policy on anticipatory compounding. 
 
 	  A physician who compounds drugs for his or her  own patients routinely sees patients  
who need compounded drug X.  The highest number of units  of drug X that the  
physician has dispensed or administered to patients after making a notation in the  
patients charts  in a  30-day period in the last year  is 500 units.  Compounding up to 
500 units of drug X in advance of making such notations in patients charts (i.e., 
before patients present at the physicians office  with a need for the compounded 
drug), and holding no more than that amount to dispense or administer to patients, 
would be consistent with this policy.  
 
C.   When a Compounded Drug Product  Can  Be Distributed Under Section 503A    
 
Compounding under section 503A(a) must be  for an identified patient based on the receipt of a 
valid prescription order   either on the receipt of a prescription order for  such individual 
patient or, under certain conditions, before the receipt of a  valid prescription order for such 
individual patient.   This means that  for each drug compounded under section 503A, the  
compounder  must obtain a valid patient-specific prescription  order.  We therefore understand  
that the  compounder  can distribute compounded drugs under  section  503A only pursuant to such  
a valid patient-specific prescription (i.e., the  compounder receives a  valid patient-specific 
prescription before the compounded drug product leaves the  compounding facility).  We  
recognize that some state boards of pharmacy  may authorize the writing of prescriptions that do 
not include individual patient names.  Such prescriptions, however, do not meet the requirement of 
a patient-specific prescription in section 503A.  Under section 503B, outsourcing facilities can fill  
such prescriptions  if they  meet  the requirements of applicable state and  Federal  laws.  
 
D.   Compounding  Office Stock/ Compounding for Office Use  
 
As discussed in section  II.A.2 of this guidance, some compounded drug products are kept  as 
office  stock/ for office use by hospitals, clinics, or health care practitioners to administer to  
patients who present  with  an  immediate need for  a compounded drug product.  Hospitals, clinics, 
and health care practitioners can obtain non-patient-specific  compounded drug products  from  
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outsourcing facilities  registered under section 503B.17   Outsourcing facilities, which are subject  
to CGMP requirements, FDA inspections  according to a risk-based schedule, specific adverse 
event reporting requirements, and other conditions that provide greater assurance of the quality 
of their compounded drug products, may, but need not, obtain prescriptions for identified 
individual patients prior  to distribution of compounded drug products  (section 503B(d)(4)(C)).18   
Therefore, outsourcing facilities can compound and distribute  sterile and non-sterile19 non
patient-specific drug products to hospitals, clinics, and health  care practitioners for office use.20  
 
Section 503A(a)(2)  provides  a pathway for anticipatory compounding in limited quantities.  A 
licensed pharmacist or licensed physician can compound a drug product  in advance of receiving 
a valid prescription order for an identified individual patient, in accordance with the  conditions  
described in  section 503A(a)(2) of the FD&C Act, to have a supply of  the drug product  ready to 
provide  to a  patient or prescriber (or,  in the case of a physician, to administer to a patient) when a  
patient-specific prescription order is presented for  the compounded drug product.  This can  
reduce  the time it would take for a compounded drug product  to be made available to  a patient  
upon receipt of a valid prescription order  for that patient.  
 
 
 
 
 
                                                 
17  See also FDAs  draft  guidance,  Hospital  and  Health System  Compounding  Under  the  Federal  Food,  Drug,  and  
Cosmetic  Act,  which,  when  final,  will  describe  FDAs  policies  regarding  the  application  of  section  503A  of  the 
FD&C  Act  to drug products  compounded for  use  within a  hospital  or  health system.  
 
18  Although  an  outsourcing  facility  may  send  prescription  drugs  to  health  care  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.    
 
19  Section  503B  defines  outsourcing  facility,  in  part,  as  a  facility  that  is  engaged  in the  compounding  of  sterile  drugs  
(section  503B(d)(4)(A)(i)).   Therefore,  an  entity  that  only  compounds  non-sterile  drugs  does  not  meet  the  definition  
of outsourcing  facility.   An outsourcing facility  may  engage  in non-sterile  compounding  provided  that  it  also 
engages  in the  compounding  of  sterile  drugs,  and provided that  it  compounds  all  of  its  drugs  (both sterile  and non-
sterile)  in  accordance  with  the  conditions  of  section  503B.  
 
20  Distribution  of  compounded  drug  products  by  outsourcing  facilities  is  subject  to the  limitations  described  in  
section 503B(a)(8),  among  other  conditions.    
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