The Drug Compounding Debate and its Importance to Dermatologists

drug compounding

This article describes the current federal policy debate regarding compounding and offers suggestions on how physicians can make their voices heard.

Health care providers often use compounded drugs—therapeutic agents that must be combined, mixed, or altered to suit individual patient needs.1 These formulations may account for as much as 5% of all prescriptions filled nationwide.2 Recently, federal and state governments have considered legislation to limit compounding with the intent of improving patient safety. However, many providers argue that these new regulations will actually harm patients given that it will become more difficult to produce medicine tailored to specific patient needs. 

Dermatologists are especially affected by these changes as many of our commonly-prescribed and clinic-administered drugs are compounded.3 This article describes the current federal policy debate regarding compounding, provides examples of common dermatology products that would be affected by the legislation, and suggests ways for physicians to make their voices heard. 

Compounded Drug Regulations

While the FDA does not approve compounded products in the same way that it approves other medications, the agency is permitted to regulate compounding practices. The Table compares characteristics of FDA-approved drugs and compounded drugs.4


Many of the current guidelines for compounded drugs are based on the 1997 Food and Drug Administration Modernization Act.5 This legislation sought to update pharmaceutical regulations that had been originally drafted in the early 20th century, and established conditions that must be satisfied for compounded drugs to be prescribed for human patients. 

Despite these regulations, a significant number of adverse events were linked to unsanitary compounded drugs between 2001 and 2013, the most serious of these involving a multistate outbreak of fungal meningitis.6 In response, the federal government passed legislation to specify guidelines for in-office compounding, and distinguish between 2 categories of compounding pharmacies: in-office pharmacies (503A facilities), and outsourcing facilities (503B facilities).

Current Controversy

In April 2016, the FDA under the Obama administration issued a ruling that significantly curtailed in-office compounding, stating that this type of compounding could only occur in “limited quantities” of “no more than a 30-day supply…to fill valid prescriptions it has not yet received.” Only outsourcing facilities were permitted to “compound and distribute […] products to hospitals, clinics, and health care practitioners for office use.”5 

All compounding pharmacies were required to register with the FDA as drug manufacturers. This ruling was intended to further strengthen safety regulations by preventing office-to-office variation in compounded drug quality and shifting compounding practices to outsourced pharmacies. Since 2016, several state governments have considered similar legislation to further restrict in-office compounding. However, various health providers believe that this regulatory trend has created unnecessary obstacles toward dispensing beneficial medications.

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