Derm Topics

Compounding in Dermatology Update – Part 1

Medication compounding is defined as any alteration, mixing, or combining of two or more ingredients that make the drug more specific to the needs of the patient.1 Compounded medications are used widely in patient care to meet their individual medical needs and maximize treatment outcomes. The Food and Drug Administration (FDA) and the United States Pharmacopeia (USP) have been the leading organizations in creating the official rules and guidelines on drug compounding.

Ever since an outbreak of fungal meningitis in 2012 from contaminated steroid injections causing multiple deaths, safety in medication compounding has been a major source of concern resulting in a series of new compounding rules, regula-tions, and guidelines set by the regulating agencies. These new standards were developed with the intention to maximize medication safety. Between 2012 and today, there have been multiple revisions and changes to the rules reflecting a very complex and dynamic issue on medication compounding.

While patient safety should and has always been the primary focus of the health providers, the FDA, and the USP, these strict and constantly changing complex rules pose many challenges to health practitioners when planning the treatment plan for their patients. Limitations to compounding particular medication mixtures can restrict treatment options leaving patients and providers with few or no good treatment alternatives and ultimately negatively affecting patient care.

The Food and Drug Administration (FDA) and United States Pharmacopeia (USP)

The FDA is the government agency that generates the official federal regulations for medication and food safety. It was established after the US Congress passed a set of federal laws called the Food Drug and Cosmetic Act (FDCA), which formed a legal framework for the FDA to operate within. Compounded medications are currently not approved for traditional distribution by the FDA because they do not ordinarily undergo a rigorous pre-market safety and quality process. Instead, the FDA now mandates that compounding must be done by a licensed pharmacist, a licensed physician, or under direct supervision of a licensed pharmacist in an outsourcing facility.1 

By contrast, the USP is not a government agency, but rather a private organization that existed prior to the FDA and has had a tremendous historic as well as present role in medication safety and public health. The USP also publishes detailed information on all the drug products including their identity, quality, parity, and potency. The FDA carefully evaluates and usually adopts USP recommendations in developing and updating new federal regulations. Thus, the FDA minimum standards closely parallel the USP standards. USP general chapter <797> contains detailed information on sterile medica-tion compounding, responsibilities, requirements, and facilities to properly compound and store these medications.2 These chapters define standards with the intent to minimize potential risks and maximize product safety.

Federal Regulations

The FDA initially created section 503A, which refers to so-called “traditional pharmacies”. These traditional pharmacies have been the main source of medication compounding in the past. They are licensed, regulated, and inspected by the states based on state statutes.3 Nevertheless, they have to follow the minimum federal regulations set by the FDA. 

After the 2012 incident of contaminated steroid injections causing an outbreak of fungal meningitis, the US Congress passed the Drug Quality and Security Act (DQSA). This act amended Section 503A of the Federal Food, Drug, and Cos-metic Act (FDCA) mandating more strict regulations and oversight of medication compounding.4 While 503A traditional pharmacies can still compound the medications, they are much more restricted with the new regulations. They can only compound and dispense a compounded medication for an individual patient’s specific prescription for up to a 30-day sup-ply. The FDA is allowed to inspect 503A traditional pharmacies if any allegations of “manufacturing” without receiving a specific prescription arise.3 In-office compounding falls under the 503A category when a licensed physician is the one who is compounding the medication. If the medication is not an FDA approved product or listed in the USP or National Formulary monograph as noted below, the drug needs to appear on FDA’s 503A bulks list. Additionally, 503A also regulated in-office compounding.

“In-office” compounding refers to sterile medication preparation by the physician or medical staff in the outpatient clinic setting. Some examples of in-office compounding used in dermatology is buffering lidocaine with sodium bicarbonate, diluting triamcinolone with normal saline or sterile water, or reconstituting botulinum toxin with normal saline. As of 2018, the states that allow for compounding of sterile drugs for in-office use in limited quantities in the absence of patient-specific prescriptions are the following: Arizona, California, Colorado, Kansas, Michigan, Nevada, New Hampshire, Oregon, South Carolina, Tennessee, and Virginia. Connecticut, Florida, Idaho, Indiana, and Maryland only allow compounding of non-sterile drugs in limited quantities.5 Some criticized studies have indicated that sterile drugs administrated through injection are more susceptible to contamination if compounded in the physician offices/clinical setting than in the pharmacy setting when in controlled environments. This has been the basis for many states developing very stringent in-office compounding criteria. In fact, many states have prohibited in-office compounding.4 

When Section 503A was amended, a new Section 503B was created. This new section refers to “outsourcing facilities”, which are a new compounding entity registered with the FDA and must meet the Federal manufacturing standards and un-dergo regularly scheduled routine inspections. These 503B outsourcing facilities can compound small or large amounts of sterile and non-sterile medications without needing patient-specific prescriptions. They do not have to be a licensed pharmacy, but compounding has to be performed under the direct supervision of a licensed pharmacist. These facilities can sell the medication to medical providers. 503B outsourcing facilities can operate across state line and they do not require prescriptions.3 Unlike 503A facilities, the 503B outsourcing facilities must comply with the current good manufacturing practices (cGMP).3 Since these new compounding pharmacies must follow a more rigorous regulatory pathway, they are considered safe and appropriate for compounding by the FDA. However, there are less of these facilities in the US, making access difficult. Also, it is usually not cost-effective for them to compound small amounts and thus they often require bulk compounding for products ordered. This can make access to their medication for patients and physicians too costly. As of September of 2019, there were about 76 FDA registered 503B outsourcing facilities in the US.6 Office use compounding can fall under either the 503A or 503B regulations. 

In contrast to “in-office” compounding, the term “office use” compounded medications refers to using medications in the physician’s office that have been compounded in an appropriate compounding pharmacy/facility. Some examples of such medication use in dermatology are topical anesthetics preparation (LET, TAL, BLT), cantharidin and other viral wart 

able to compound these medications in small quantities and sell them to physicians offices thus making them cheaper and more accessible, but they can only be obtained with a patient-specific prescription. 503B outsourcing facilities can provide these compounded medications for office use, but this often means that the medication needs to be ordered in much larger quantities that will likely not be used before the medication expiration date or they may be more difficult and costly to obtain.4 

State Regulations 

All states have the authority to regulate their pharmacies. As stated earlier, each state regulatory body has to, at a mini-mum, follow the federal regulations for minimum standards in medication safety and compounding. These include the FDA regulations and the current Good Manufacturing Practices (cGMP) related to compounding. In addition to the FDA minimum standards, each state can include additional state specific and more stringent regulation rules. States usually create or enforce these rules either through the state pharmacy boards or the state medical boards. 

Most states adopt the USP standards and guidelines to establish their minimum standards even if higher than the FDA regulations. Each state can make its own additional rules stricter than the USP guidelines and the variation seems to be somewhat arbitrary, likely due to different interpretations of the USP guidelines. 

States that currently require full compliance with USP general chapter <797> are the following: Arizona, Connecticut, Delaware, Florida, Georgia, Hawaii, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and Wyoming.5 

States that have “equivalent quality standards” (meaning that state requirements on sterile compounding practice are equivalent to or stricter than the USP <797> requirements) are: Wisconsin, Texas, South Dakota, Rhode Island, New Jersey, Nevada, Missouri, Illinois, California, Colorado, and Arkansas.5 

Alabama, Alaska, District of Columbia, Idaho, New York, Oregon, and Pennsylvania require other quality standards. Kansas is the only state that doesn’t require quality standards.5 

Traditionally, state pharmacy boards only regulated pharmacists and compounding facilities. However, some states, like Ohio, have started to include physicians’ offices under the board of pharmacy rules, putting more restrictions on the phy

sicians’ offices. In 2017, the State of Ohio Board of Pharmacy passed a law requiring a “Terminal Distributor of Dangerous Drugs license” for any “person who is engaged in the sale of dangerous drugs at retail, or any person, other than a wholesale distributor or a pharmacist, who has possession, custody, or control of dangerous drugs for any purpose other than for that person’s own use and consumption.”7 “Dangerous drug” refers to any medication that requires a prescription from a licensed provider.8 

Another rule that seems to be highly variable from state to state is the timeframe during which in-office medication must be used after compounding. California, for example, mandates the use of such medication within one hour of compounding. Ohio has a 6 hours time limit. Both of which are much more strict than the current USP guidelines, which Florida currently follows. The most current USP guidelines require such compounds to be used within 12 hours of compounding if left at the controlled room temperature and will be discussed further in this article. This variation between states argues for a more uniform, evidence-based standard to be developed. The hope is that the upcoming USP update can help guide the state laws in such a way as to create a more uniform regulatory pathway and rules.4

Stay tuned for part 2 of the this 2-part series where the authors discuss FDA and USP Compounding Lists/ Categories and provide their final thoughts on in-office compounding.


  1. human-drug-compounding  
  2. USP General Chapter <797>, Pharmaceutical compounding sterile preparations, USP 42-NF 37 
  3. Barlas S. Compounding law five years later FDA Implementation Slow, industry criticism significant. Pharmacy and Therapeutics. 2018;43(5):271-273, 305. 
  4. Quertermous J, Desai S, Harber J, et al. The practice of compounding, associated compounding regulations, and the im-pact on dermatologists. J Drugs Dermatol. 2018;17(7):s17-s22. 
  7. State of Ohio Board of Pharmacy [Internet]. [cited 2017 Dec 26]. Available from: 

Vlatka Agnetta MD, Abel Torres MD JD MBA, Seemal R. Desai MD, Adelaide A. Hebert MD, Leon H. Kircik MD (2020). Compounding in Dermatology Update. Journal of Drugs in Dermatology, 19 (2).

Content used with permission from the Journal of Drugs in Dermatology.

Adapted from original article for length and style.

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