What the Doctor Ordered? What the Pharmacist Understood? FDA Issues Compounding Draft Guidance Addressing Compounding for Office Use under FDC Act § 503A

April 21, 2016

By Karla L. Palmer

On April 15, 2016, FDA released a draft guidance document providing clarification concerning FDA’s position on prescription requirements for compounding human drug products for identified individual patients. Since the 2013 passage of the Drug Quality and Security Act, there has been a degree of confusion whether compounders acting under Section 503A were permitted to compound for office use (i.e., office stock) under certain circumstances. FDA has publicly stated on several occasions since the passage of the DQSA that pharmacies that desired to maintain statutory exemptions in Section 503A (i.e., exemptions from new drug, adequate directions for use, and cGMP requirements) were limited to compounding for individually identified patients pursuant to a prescription, but some in Congress and the compounding pharmacy industry disagreed, and sought clarification of the issue.

Now – as it exists in draft form – FDA’s opinion (and guidance) is clear. Pharmacies acting pursuant to Section 503A must compound pursuant to a prescription for an individually identified patient. Like other guidance documents, this draft contains the statement that it does not establish legally enforceable responsibilities, but instead describes the Agency’s current thinking on a topic that should be viewed as recommendations unless specific statutory or regulatory requirements are cited.  

At the outset of the draft guidance, FDA states that Section 503A describes two situations in which a drug product can be compounded: (1) based on the receipt of a valid prescription order for an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; or (2) in limited quantities before the receipt of a valid prescription order for an identified individual patient. FDA confirms that “Section 503A does not provide for distributing a compounded drug product before receiving a valid prescription order of an identified individual patient.”

FDA asserts that 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 products compounded under Section 503A. . . are provided to a patient only based on individual patient need.“ A prescriber may write a prescription for an identified individual patient who “needs the compounded product.” In an office setting, a physician may compound a drug after making a notation in the chart of a patient “who presents with a need for the compounded medication.” FDA draft guidance also addresses “anticipatory compounding” in the context of an established relationship with a particular prescriber or patient. FDA’s draft policy gives specific direction with respect to the following:

Receipt of a Valid Prescription Order or a Notation Approved by the Prescriber under Section 503A

FDA states that if it is “not obvious from a prescription order that the prescription is for a compounded drug product,” a pharmacist “may consult with a prescriber to determine whether patient needs a compounded drug and make an appropriate notation on the prescription order. “ (Emphasis supplied.)   FDA also states that the notation “must document the prescriber’s determination that the compound is necessary for the identified patient.   FDA recommends inclusion of the following statement on each prescription:

Per [type of communication] with [name of prescriber] on [date], [name of prescriber] has advised that compounded [name of drug] is necessary for the treatment of [name of patient].

FDA says that the prescription must identify the patient for whom the compound is prescribed; if the intended patient is not identified or unclear, then the “valid prescription requirement” will not be satisfied. And, the pharmacist must contact the prescriber if the patient identity is unclear, and cannot dispense the prescription unless it clarifies the patient’s identity.

When a Drug May be Compounded

Unless the drug is compounded in limited quantities consistent with FDA’s guidance on anticipatory compounding, FDA makes clear that the “drug product must be compounded after receipt of a valid prescription, which FDA states is compounding ‘on’ receipt of a valid prescription order consistent with Section 503A(a)(1).

Compounding Before Receipt of a Valid Prescription Order  

A drug may be compounded before the receipt of a valid prescription – in limited quantities – if all conditions of Section 503A are met, and the following:

  • The compounding is based on a history of receiving valid prescription orders (including chart orders) for the compounding of the human drug product.
  • The orders have been generated solely within an “established relationship” between the physician or pharmacist and the patient or prescriber.

FDA’s draft guidance quantifies and illustrates “limited quantities:” At this time FDA does not consider a compounder to have exceeded the limit if the compounder:

  • Holds for “distribution” (i.e., product immediately available and not awaiting further testing) no more than a 30-day supply to fill valid prescriptions not yet received.
  • The amount of supply is based on the number of valid prescriptions the compounder has received for identified individual patients in a 30-day period over the past year that the compounder has selected. In other words, it seems a compounder may pick his or her highest month of dispensing a particular preparation and compound that amount going forward in anticipation of receiving prescriptions during a thirty day period.  

When a Compounded product may be distributed under Section 503A

FDA reiterates throughout the draft guidance that compounds must be pursuant to Section 503A. FDA notes that, although it recognizes that state boards of pharmacy may permit “writing of prescriptions that do not include individual names,” FDA interprets Section 503A to require patient-specific prescriptions.

Office Stock / Office Use

FDA states that hospitals, clinics, and health care practitioners may obtain non patient-specific compounds from Section 503B outsourcing facilities (but any compounds dispensed from the outsourcing facility must be pursuant to a patient specific prescription).


Lastly, FDA seeks to expand compounders’ current recordkeeping requirements. Compounders should keep detailed records to demonstrate compliance with Section 503A, including those that demonstrate: (1) appropriate anticipatory compounding (including calculations performed to determine limited quantities that may be compounded before receipt of the prescription); (2) prescription orders bearing notations that the compound is necessary, and (3) the identity of the individual patient.

Comments are due on July 18, 2016.