503B Compounding Pharmacy: A Complete Guide for Healthcare Providers

If you work in healthcare — whether in a hospital pharmacy, ambulatory surgery center, physician practice, or health system — you have likely encountered the term "503B compounding pharmacy." These specialized facilities play an increasingly important role in the pharmaceutical supply chain, particularly for sterile injectable medications, drug shortage alternatives, and customized formulations.

This guide explains what 503B compounding pharmacies are, how they work, what sets them apart from traditional pharmacies, and how to evaluate them as a compounding partner for your organization.

What Is a 503B Compounding Pharmacy?

A 503B compounding pharmacy — formally known as a 503B outsourcing facility — is a type of compounding pharmacy that is registered with the FDA under Section 503B of the Federal Food, Drug, and Cosmetic Act. This section was added by the Drug Quality and Security Act (DQSA) of 2013, which Congress passed in response to the 2012 New England Compounding Center (NECC) fungal meningitis outbreak that killed 76 people and sickened hundreds more.

Unlike traditional pharmacies that compound medications for individual patients based on specific prescriptions, 503B outsourcing facilities can compound medications without patient-specific prescriptions. This means they can produce larger batches of compounded drugs and distribute them directly to healthcare facilities for office use or hospital administration.

Key Characteristics of 503B Facilities

• FDA-registered: Must register with the FDA and report the drugs they compound
• cGMP compliance: Must follow current Good Manufacturing Practice (cGMP) regulations, similar to traditional drug manufacturers
• FDA inspected: Subject to FDA inspection on a risk-based schedule
• No patient-specific prescription required: Can compound in bulk for healthcare facilities
• Adverse event reporting: Must report serious adverse events to the FDA
• Label requirements: Products must include specific labeling identifying them as compounded

503B vs. 503A Pharmacies: What Is the Difference?

The most common source of confusion in compounding pharmacy is the difference between 503A and 503B facilities. Both compound medications, but they operate under very different regulatory frameworks.

For a more detailed comparison, see our guide: 503A vs 503B Pharmacies: Understanding the Key Differences.

What Services Do 503B Compounding Pharmacies Offer?

503B outsourcing facilities typically specialize in one or more of the following compounding categories:

Sterile Compounding

The most common service offered by 503B facilities is sterile compounding — the preparation of injectable, ophthalmic, and other sterile dosage forms. This includes:

• Pre-filled syringes: Ready-to-administer injectable medications
• IV admixtures: Intravenous solutions compounded for hospital use
• Ophthalmic preparations: Sterile eye drops and irrigating solutions
• Intrathecal preparations: Medications for spinal administration

Sterile compounding is where 503B facilities provide the most value, as it requires specialized cleanroom environments, environmental monitoring, and quality testing that many hospital pharmacies cannot maintain in-house.

Non-Sterile Compounding

Some 503B facilities also produce non-sterile dosage forms:

• Oral solutions and suspensions: Liquid medications for patients who cannot swallow tablets
• Topical preparations: Creams, ointments, and gels
• Capsules: Custom-dose capsules not commercially available
• Sublingual preparations: Medications for under-the-tongue administration

Drug Shortage Alternatives

One of the most important roles 503B facilities play is producing alternatives to commercially manufactured drugs that are in shortage. When the FDA places a drug on the drug shortage list, 503B facilities can compound equivalent formulations to help healthcare providers maintain patient care.

Specialized Formulations

Many 503B facilities offer specialized compounding services:

• Preservative-free formulations: For patients with sensitivities
• Hazardous drug compounding: USP <800> compliant preparation of chemotherapy and other hazardous drugs
• Veterinary compounding: Some facilities serve both human and veterinary markets
• Custom concentrations: Doses not available from commercial manufacturers

How Many 503B Pharmacies Are There?

As of early 2026, approximately 93 facilities are registered with the FDA as 503B outsourcing facilities. These facilities are concentrated in a handful of states:

• Florida: 15 registered facilities
• Texas: 15 registered facilities
• New Jersey: 8 registered facilities
• California: 6 registered facilities
• Colorado: 4 registered facilities

For the complete list by state, see our 503B Pharmacies by State directory or the FDA 503B Outsourcing Facilities List.

How to Choose a 503B Compounding Pharmacy

Selecting the right 503B outsourcing facility is a critical decision for any healthcare organization. Here are the key factors to evaluate:

1. FDA Registration and Inspection History

Start by confirming that the facility is currently registered with the FDA. Then review its inspection history:

• Has the facility been inspected recently?
• Were any Form 483 observations issued? If so, what were they?
• Has the facility received any warning letters?
• Were prior observations adequately addressed?

You can check inspection records on our FDA Inspection Results page or search individual facility profiles in our directory.

2. Quality Systems and Accreditation

Look beyond FDA registration:

• Does the facility follow cGMP standards consistently?
• Is the facility PCAB accredited (Pharmacy Compounding Accreditation Board)?
• What quality control testing does the facility perform on finished products?
• Does the facility have a robust environmental monitoring program?

For more on environmental monitoring, see our guide: Environmental Monitoring Best Practices for 503B Facilities.

3. Product Portfolio and Capabilities

Evaluate whether the facility can meet your clinical needs:

• Does the facility compound the specific drugs you need?
• What dosage forms are available (syringes, vials, bags)?
• Can the facility handle your volume requirements?
• What are the standard and expedited turnaround times?
• Does the facility offer drug shortage alternatives?

4. Supply Chain Reliability

Reliable supply is essential, especially for critical medications:

• Does the facility maintain adequate inventory or safety stock?
• What is the facility's track record for on-time delivery?
• Does the facility have contingency plans for supply disruptions?
• Are there minimum order requirements?

5. Beyond-Use Dating (BUD)

Longer beyond-use dates provide more flexibility for healthcare facilities:

• What BUDs does the facility assign to its products?
• Are BUDs supported by stability testing data?
• Can extended BUDs reduce waste and ordering frequency?

6. Pricing and Contract Terms

While cost should not be the primary factor, it matters:

• How does the facility's pricing compare to commercial alternatives and other 503B facilities?
• Are volume discounts available?
• What are the payment terms and return policies?
• Are there GPO (group purchasing organization) contracts available?

Common 503B Compounding Pharmacy Medications

Some of the most commonly compounded medications from 503B facilities include:

• Sodium bicarbonate injection — frequently in shortage
• Bupivacaine and other local anesthetics — pre-filled syringes for surgery centers
• Ondansetron (Zofran) — anti-nausea for surgical settings
• Dexmedetomidine — sedation for ICU and procedural use
• Norepinephrine — vasopressor for critical care
• Compounded tirzepatide and semaglutide — GLP-1 medications (see our GLP-1 compounding guide)
• Preservative-free medications — for intrathecal and ophthalmic use
• Topical pain compounds — multi-ingredient topical preparations

How 503B Pharmacies Fit into the Healthcare Supply Chain

503B outsourcing facilities serve as a bridge between traditional compounding pharmacies and full-scale drug manufacturers. They fill critical gaps in the pharmaceutical supply chain:

1. Drug shortages: When commercial manufacturers cannot meet demand, 503B facilities can produce equivalent formulations
2. Customization: When patients need doses, concentrations, or formulations not commercially available
3. Efficiency: Pre-mixed, ready-to-administer products reduce preparation time and medication errors in hospitals
4. Cost management: Compounded alternatives are often less expensive than branded commercial products

Regulatory Outlook for 503B Pharmacies

The regulatory landscape for 503B facilities continues to evolve:

• FDA inspection frequency: The FDA has increased its inspection cadence for 503B facilities, with most facilities inspected every 1-2 years
• Draft guidances: The FDA continues to issue draft guidances on topics including insanitary conditions, essentially a copy drugs, and the bulk drug substances list
• State regulation: Some states have additional registration or licensing requirements beyond the federal 503B framework
• Quality expectations: The FDA has signaled that it expects 503B facilities to move toward full cGMP compliance over time

For the latest on regulatory requirements, see our 503B Regulations Guide and Preparing for FDA 2025 Inspections.

Find a 503B Compounding Pharmacy

Use our free 503B pharmacy directory to search for registered outsourcing facilities by name, state, or location. Each facility profile includes:

• Current FDA registration status
• Inspection history and Form 483 records
• Products compounded
• Contact information
• Location details

You can also browse facilities by state using our 503B Pharmacies by State page, or learn more about the FDA's official list in our FDA 503B Outsourcing Facilities List guide.