What are compounded drugs?

last updated: Nov 02, 2023

7 min read

Over 19,000 prescription drugs have been approved by the Food and Drug Administration. However, in some cases, none of these drugs may be an option. What if a particular drug isn’t commercially available in a dose or formulation that meets a patient’s individual needs? What if drugs manufactured by the pharmaceutical industry are unsafe for people with sensitivities to dyes or multiple ingredients? Compounded medications offer solutions to such “what if” scenarios, including when a particular drug, dose, or dosage form isn’t commercially available. 

Compounded medications are custom-made by pharmacists based on a prescription from a healthcare provider. Pharmaceutical compounding is the preparation of customized medications in order to meet the specific needs of patients that cannot be met by commercially available options. Compounded medications can be particularly beneficial for individuals with allergies, sensitivities, or difficulty swallowing traditional medications.

When considering compounded medications, however, people justifiably ask many questions. What exactly are compounded medications? Are they safe? What is a compounding pharmacy, and how do they differ from other pharmacies? 

If you've had these questions or find yourself curious about the safety, efficacy, and regulation of compounded medications, you're in the right place. Keep reading to learn about compounded medications to make informed decisions about your healthcare.

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What are compounded medications? 

According to the American Pharmacists Association, compounded medications are pharmaceutical products prepared by a pharmacist to meet the individualized needs of a patient when commercially available medications do not fulfill those requirements. 

Compounding may involve making medications using bulk ingredients or making changes to existing medications. When using commercially available drugs as a starting point, examples of changes made by a compounding pharmacist may include:

  • Altering, diluting, or combining the active ingredients 

  • Enhancing or changing the inactive (“filler”) ingredients, such as flavoring

  • Changing the strength, dosage form, or how it is given to the patient

Drug compounding and drug manufacturing are not the same thing.

Drug manufacturing focuses on the mass production of FDA-approved medications, while compounding is generally a smaller-scale production. Unlike mass-produced drugs for the population at large, compounding is designed to offer innovative solutions to medications that are tailored to individuals or small groups with unique needs. Compounding pharmacies are regulated by the US Food and Drug Administration and state Boards of Pharmacy, and are subject to both federal and state requirements regarding compounding. When compounding in compliance with those requirements, compounded drugs are not subject to the FDA's new drug approval process, among other requirements that drug manufacturers must adhere to.

Typically, compounded medications are made by pharmacists and pharmacy technicians. Some physicians also compound their own medications as well.

Nearly any form of medication can be compounded, such as: 

  • Capsules

  • Creams and ointments

  • Eye drops

  • Injections

  • Lozenges

  • Oral liquid suspensions, such as Magic Mouthwash

  • Suppositories

  • Tablets

Compounded medications can be categorized into two groups: sterile and non-sterile. Sterile compounds, such as injections and eye drops, have stricter regulations to ensure they are free from bacteria or contamination. Non-sterile compounds, on the other hand, still require a clean environment but do not have the same level of quality standards as sterile compounds.

Why would someone need compounded medication?

Prescription medication usage is on the rise. As new medications become available and research about their effectiveness emerges, more healthcare providers prescribe them. However, increased medication prescribing raises concerns about safely and effectively administering medication to patients with unique needs or challenges.

There are a number of reasons why an individual may not be able to take a medication as the drug’s manufacturer originally intended. Next, we’ll review some common reasons, highlighting how medication compounding offers an innovative way to address these challenges.

Dosage or strength modification

In some instances, the dosages or strengths produced by drug manufacturers may be too high or too low for a patient’s needs. Sometimes, this can be resolved by splitting a tablet or taking multiple doses; however, in some situations, these solutions do not work. Example: A patient requires a 4-milligram daily dose of a drug, but the lowest strength that’s commercially available is 30 mg.

In cases like this, a compounding pharmacy can make a custom medication into a specific strength by adding more or less of the active drug to the product. For instance, a healthcare provider may need a custom-made low dosage of medication for a pediatric patient (infant or child) because the adult dosage would be unsafe, and lower strengths are not commercially available. 

Another example of this type of custom compounding is bioidentical hormone creams. Thought to reduce the symptoms associated with the hormonal changes of menopause, these creams come in set strengths. However, compounding pharmacies can alter the strength by including more of the active hormone ingredient in the cream (or adding more of the inactive ingredients to dilute the cream), allowing for prescriber-specified individualization of the cream for their patient.

Medication taste 

Many oral medications taste bad. Often, this is an intentional safety feature designed to deter children or pets from taking the drug. However, when a child or pet must take the medication, the bad taste becomes a challenge. 

Using compounding techniques and flavoring ingredients, pharmacies can add or change the flavor of medications. As well, kid-friendly and pet-friendly flavor options are designed to make the medication-taking experience better for the patient and the caregiver. 


Medications contain active ingredients, which are the chemicals that make the drug work for its intended purpose. However, each medication also contains many inactive (“filler”) ingredients, which serve no medical action but provide various other functions, such as preserving or coloring the medication. Some individuals have allergies to certain inactive ingredients but require the active ingredient to treat an illness or condition. 

In these instances, compounding pharmacies can follow a modified “recipe” to reproduce the medication, but without the offending ingredient the patient is allergic to. This workaround provides effective treatment without risking an allergic reaction.

Dosage form changes 

Perhaps the most common reason for pharmaceutical compounding involves altering the form of the medication. Most medications come as tablets or capsules; however, taking either of these forms relies on a person’s swallowing ability. For many patients, especially children and older adults, swallowing pills presents a challenge, especially if the tablets are large and/or chalky in texture. 

Compounding pharmacies can transfer the active ingredient into a dosage form that’s more accessible for people with swallowing issues. This often involves creating an oral liquid version of a medication for easier swallowing. Other conversion options include creams to rub into the skin, lozenges to dissolve in the mouth, or even lollipops for children to allow slower dissolving of a medication. 

Compounding chronic pain medications to alter the dosage form is not uncommon. Dosage form changes may be sought when a patient responds negatively to a specific form of medication. For example, if an oral pain medication causes stomach upset and the patient stops taking it, their pain may go untreated. In such situations, alternative dosage forms like rectal suppositories can be compounded to provide a different route of administration and avoid stomach-related problems.

Drug shortages

Compounding of copies of commercially available medications is usually not allowed by law. However, if a product is no longer available due to a shortage, a compounded version may be allowed. This exception is made to ensure people can still get the medication they need if other alternatives aren’t an option.

What to look for in a compounding pharmacy

Compounded medications can be an option when prepared by reputable compounding pharmacies and used under the guidance of healthcare professionals. However, it is crucial to choose a compounding pharmacy that adheres to strict quality control measures and has proper licensing. 

While compounded medications are good alternatives for patients when prepared properly, deadly safety issues have occurred. In 2012, there was an incident in which a large compounding pharmacy distributed contaminated steroid injections. Unfortunately, this resulted in an outbreak of fungal meningitis, a dangerous infection causing brain and spinal cord inflammation that can be life-threatening.

After the incident, the 2013 Drug Quality and Security Act was passed to improve the safety of compounded medications. The Act clarified the FDA’s authority to regulate traditional drug compounding, in conjunction with state Boards of Pharmacy as the primary authority regulating day-to-day operations. In addition, it created a new category of entities, called outsourcing facilities, which are intended to be larger facilities operating at higher volumes, but subject to greater regulatory controls and requirements. The changes aimed to ensure patients have access to compounded drug products while also ensuring such products are compounded properly and under the right conditions.

Open communication between patients, pharmacists, and healthcare providers is essential to ensure the safe use of compounded medications. Ultimately, the decision to use compounded medications should be based on a thorough discussion between the patient and the healthcare provider.

Who can compound medications? 

Licensed pharmacists and physicians, as well as pharmacy technicians under the direct supervision of a licensed pharmacist, may perform medication compounding. Most commonly, compounding of medications occurs at a pharmacy. Any pharmacy with an appropriate state license can compound non-sterile medications if they choose. However, not every pharmacy offers compounding services due to the increased regulations required at the state and federal levels.

While each state has different regulations, compounding pharmacies must follow basic guidelines and requirements from the FDA for compounding pharmacies. Section 503A explains that compounding and dispensing can only take place pursuant to patient-specific prescriptions, among other requirements (a.k.a. 503A compounding facility).

While not a requirement, some compounding pharmacies pursue special certification known as accreditation. A number of different organizations provide accreditation through special training, inspection, and regulation to further guarantee the quality of the compounded medications. The two main programs for compounding pharmacy accreditation are managed by the National Association of Boards of Pharmacy (NABP) and the Pharmacy Compounding Accreditation Board (PCAB)

How to get compounded drugs

Healthcare providers must prescribe compounded medications. They are not available for purchase over the counter. 

Keep in mind that your insurance may not cover prescriptions for compounded medications, and most compounding pharmacies do not submit claims to insurance companies. Some insurance plans have forms where you can submit claims for reimbursement, though. 

To find a compounding pharmacy for specialized medications, ask the prescriber or pharmacist for a recommendation or consult the list of accredited compounding pharmacies published by the PCAB. This list ensures the safest and most reputable options. The Alliance for Pharmacy Compounding (APC) also offers a search tool and advice for finding reputable compounding pharmacies.

Compounding FAQs

Here are some additional common questions and answers about compounded medications.

How do I know if a medication I received from a pharmacy is compounded?

The American Pharmacists Association (APhA) states that most compounding pharmacies participate in the practice of labeling their dispensed products as “compounded,” so check the pharmacy label for this designation. If you’re unsure, ask a pharmacy staff member. Your pharmacist can also walk you through the instructions for taking or using the medication. 

How does veterinary compounding work?

Compounding for animals’ medications works in essentially the same way as it does for humans. Compounded medications are typically reserved for animals who cannot take certain forms of medications, such as a pet who will not swallow a pill. Pet-friendly flavors, such as tuna, chicken, or beef, are typical offerings from compounding pharmacies.

Do compounded medications cost the same as regular medications? 

Compounded medications can be more expensive than getting the drug from drug manufacturers. Generally, the process of compounding medication is more costly and time-consuming than the dispensing of regular prescription drugs. It's important to consider that a high-quality custom-made compound may come with a higher price tag. Insurance will not always cover compounded medications; therefore, asking about costs is an essential part of the process.


If you have any medical questions or concerns, please talk to your healthcare provider. The articles on Health Guide are underpinned by peer-reviewed research and information drawn from medical societies and governmental agencies. However, they are not a substitute for professional medical advice, diagnosis, or treatment.

How we reviewed this article

Every article on Health Guide goes through rigorous fact-checking by our team of medical reviewers. Our reviewers are trained medical professionals who ensure each article contains the most up-to-date information, and that medical details have been correctly interpreted by the writer.

Current version

November 02, 2023

Written by

Patricia Weiser, PharmD

Fact checked by

Yael Cooperman, MD

About the medical reviewer

Yael Cooperman is a physician and works as a Senior Manager, Medical Content & Education at Ro.

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