Compounded vs FDA-approved drugs

An FDA-approved drug has had its data reviewed by FDA, which found that its benefits outweigh its known and potential risks for the people it is meant for ^[1]. A compounded drug is made by a pharmacist or doctor for one patient's needs, and it is not FDA approved. FDA does not check a compounded drug's safety, effectiveness or quality before it is sold ^{[3, 4]}.

What FDA review means

FDA's Center for Drug Evaluation and Research (CDER) evaluates new drugs before they can be sold ^[1]. A drug maker must first test the drug in the lab, in animals and then in people. It then sends the evidence to CDER ^[1]. A team of doctors, statisticians, chemists, pharmacologists and other scientists reviews the data and the proposed label ^[1].

FDA usually expects results from two well-designed clinical trials. This helps show the findings are not the result of chance or bias. For some rare diseases, one convincing trial may be enough ^[1].

The formal request for approval is a new drug application (NDA). After an NDA arrives, FDA has 60 days to decide whether to file it for review ^[2]. Reviewers check whether the studies show the drug is safe and effective for its proposed use ^[2]. FDA also reviews the professional label and inspects the facilities where the drug will be made ^[2].

Approval is not the end. FDA keeps tracking approved drugs for adverse events through a postmarketing surveillance program ^[2]. One way FDA manages a drug's risks is the FDA-approved label, which describes the drug's benefits and risks and how the risks can be found and managed ^[1].

What compounding is

FDA describes compounding as a practice in which a licensed pharmacist or doctor combines, mixes or alters drug ingredients to make a medicine for one patient's needs. In an outsourcing facility, a person supervised by a licensed pharmacist may do this ^[3].

FDA gives examples of why a patient may need a compounded drug. One patient may be allergic to a dye and need a version without it. An older adult or a child may not be able to swallow a tablet and need a liquid ^[4]. Compounders may also make versions of a drug on FDA's drug shortage list if federal conditions are met ^[4].

A compounded drug is not the same as a generic. A generic drug is approved by FDA and must show it is therapeutically equivalent to the brand, among other rules. A compounded drug is not approved ^[4].

The two federal paths for compounding

Section 503A of the Federal Food, Drug, and Cosmetic Act covers compounding by a licensed pharmacist in a state-licensed pharmacy, or by a doctor, for an identified patient with a valid prescription ^{[6, 7]}. These drugs are exempt from FDA approval, current good manufacturing practice (CGMP) rules and labeling with adequate directions for use ^[6]. State boards of pharmacy do most of the day-to-day oversight of these pharmacies ^[4].

Section 503B covers outsourcing facilities, a group created in 2013 by the Drug Quality and Security Act ^[4]. They must follow CGMP rules, are inspected by FDA on a risk-based schedule, and may fill orders for office stock ^{[4, 6]}. Our page on 503A vs 503B pharmacies explains the split in more detail ^[6].

Under 503A, a bulk ingredient must meet a USP or National Formulary monograph if one exists. If none exists, it must be a component of an FDA-approved drug or appear on FDA's 503A list ^[7]. The FDA Peptide Status Tracker shows where each peptide on this site stands ^[7].

Biologics cannot be compounded under 503A or 503B. Federal law gives no legal path to market a biologic made outside an approved biologics license application ^[4].

The risks FDA names

FDA says compounded drugs should only be used in patients whose medical needs cannot be met by an FDA-approved drug ^[4]. Poor compounding can cause contamination or a drug with too much or too little active ingredient. This can lead to serious injury and death ^{[4, 5]}.

FDA also notes that compounded drug labels may lack important information, such as adequate directions for use ^[5]. FDA keeps finding insanitary conditions at compounding facilities during inspections ^[5]. In 2012, contaminated drugs from one Massachusetts pharmacy led to more than 750 cases of infection and more than 60 deaths in 20 states ^[6].

The GLP-1 example

FDA has a page on its concerns with compounded GLP-1 drugs such as semaglutide and tirzepatide ^[8]. As of May 31, 2026, FDA had received 990 adverse event reports tied to compounded semaglutide and more than 730 tied to compounded tirzepatide ^[8]. State-licensed pharmacies that are not outsourcing facilities do not have to report adverse events to FDA, so FDA says these events are likely underreported ^[8].

FDA lists other concerns: dosing errors, doses above the approved label, salt forms of semaglutide, drugs that arrive warm, and fraudulent labels naming pharmacies that did not make the product ^[8]. FDA also says retatrutide and cagrilintide cannot be used in compounding under federal law ^[8].

FDA asks patients, health care professionals and compounders to report adverse events or quality problems to its MedWatch program ^[8].

Frequently asked questions

Are compounded drugs FDA approved?

No. FDA says compounded drugs are not FDA approved, so it does not verify their safety, effectiveness or quality before they are sold ^[4].

Is a compounded drug the same as a generic?

No. A generic is approved by FDA and must show therapeutic equivalence to the brand. A compounded drug is not approved ^[4].

Why would a doctor prescribe a compounded drug?

FDA's examples include a patient allergic to a dye in the approved product, or a child or older adult who needs a liquid instead of a tablet ^[4].

Who inspects compounding pharmacies?

State boards of pharmacy oversee most state-licensed pharmacies day to day. FDA mainly oversees 503B outsourcing facilities and inspects them on a risk-based schedule ^[4].

How many trials does FDA usually want before approval?

FDA generally expects two well-designed clinical trials. For some rare diseases, one convincing trial may be enough ^[1].

Can peptides be compounded?

Only if the ingredient meets federal rules, such as having a USP monograph, being part of an approved drug, or being on FDA's 503A list. Biologics cannot be compounded ^{[4, 7]}.

How do I report a problem with a compounded drug?

FDA asks people to report adverse events or quality problems to its MedWatch Adverse Event Reporting program ^[8].