# 503A vs 503B pharmacies: who can compound what

> How federal law splits drug compounding between 503A pharmacies and 503B outsourcing facilities: prescriptions, CGMP, inspections and bulk ingredients.

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- Last updated: October 25, 2026
- Publisher: Living+

Federal law has two paths for compounded drugs. Section 503A covers state-licensed pharmacists and doctors who compound for an identified patient with a valid prescription [1, 3]. Section 503B covers outsourcing facilities, which register with FDA, must follow current good manufacturing practice (CGMP) rules, and may also fill orders for office stock [2, 3, 4].

## Where the two sections come from

Section 503A was added to the Federal Food, Drug, and Cosmetic Act (FD&C Act) in 1997 [1]. In 2012, contaminated drugs from a Massachusetts compounding pharmacy led to more than 750 cases of infection and more than 60 deaths in 20 states [3]. Congress responded with the Drug Quality and Security Act (DQSA), enacted on November 27, 2013. The DQSA kept section 503A and added section 503B [3].

Neither path makes a compounded drug FDA approved. FDA does not review compounded drugs for safety, effectiveness or quality before they reach patients [3]. FDA says compounded drugs should only be used in patients whose medical needs cannot be met by an FDA-approved drug [13].

## Section 503A: compounding for one patient

Under 503A, the drug is compounded for an identified individual patient based on a valid prescription order [1]. The compounding is done by a licensed pharmacist in a state-licensed pharmacy or federal facility, or by a licensed physician [1]. A 503A compounder may make limited amounts before a prescription arrives, but only based on a history of prescriptions within an established relationship [1].

In return, 503A drugs are exempt from three federal rules: FDA approval before marketing, CGMP requirements, and labeling with adequate directions for use [3]. The law sets other limits too:

- No regular or large-scale compounding of drugs that are essentially copies of a commercially available drug [1].
- No compounding of drugs on FDA's list of products withdrawn or removed from the market because they were unsafe or not effective [1].
- In a state without a memorandum of understanding with FDA, out-of-state shipments may not exceed 5 percent of the total prescription orders the pharmacy or physician dispenses or distributes [1].

## Section 503B: outsourcing facilities

An outsourcing facility is a facility at one location that compounds sterile drugs, has elected to register with FDA, and meets all of section 503B [4]. The compounding must be done by or under the direct supervision of a licensed pharmacist [2]. Unlike 503A, these drugs are not exempt from CGMP rules [3, 4].

Outsourcing facilities carry more federal duties [2, 4]:

- Register with FDA each year between October 1 and December 31 [2].
- Report the drugs they compounded to FDA every June and December [2, 4].
- Report adverse events and accept FDA inspections on a risk-based schedule [2, 4].
- Label each drug with "This is a compounded drug.", the statement "Not for resale", and "Office Use Only" when it is not dispensed for an identified patient [2].

A 503B drug may not be essentially a copy of one or more approved drugs. It also may not be resold by anyone other than the facility that made it, though it can still be given in a health care setting or dispensed on a prescription [2].

## Bulk ingredients: the biggest difference

A bulk drug substance is the active ingredient a compounder starts from. Under 503A, a bulk substance must meet a United States Pharmacopeia (USP) or National Formulary monograph if one exists. If no monograph exists, it must be a component of an FDA-approved drug. If it is neither, it must appear on FDA's 503A bulks list [1, 5]. That list names six substances, five of them for topical use only [12].

Under 503B, the rule is stricter. An outsourcing facility may compound from a bulk substance only if the substance is on the 503B bulks list for clinical need, or the drug appears on FDA's drug shortage list at the time of compounding, distribution and dispensing [2, 6]. FDA's 503B bulks list page names five substances with a clinical need, each limited to a route such as topical or oral use [7].

While FDA reviews nominated substances, it sorts them into interim categories. Our page on [Category 1 vs Category 2 bulk substances](/regulation/category-1-vs-category-2-bulk-substances/) explains what each category means [5, 6].

## GLP-1 drugs and the 503B list in 2026

On May 1, 2026, FDA published a notice proposing not to include [semaglutide](/peptides/semaglutide/), [tirzepatide](/peptides/tirzepatide/) and [liraglutide](/peptides/liraglutide/) on the 503B bulks list [8]. The notice sits in docket FDA-2018-N-3240, the public docket for the 503B clinical need list [8, 10]. FDA later extended the comment period to July 30, 2026 [9]. This is a proposal. A final decision would come in a later notice, so check the [FDA Peptide Status Tracker](/regulation/tracker/) for the current status of each drug [8, 9].

## Biologics fall outside both paths

On March 23, 2020, certain approved biological products moved to licensing under the Public Health Service Act. FDA says those products are not eligible for the compounding exemptions in either section 503A or 503B [11]. The [tesamorelin](/peptides/tesamorelin/) page shows how this affects one peptide drug [11].

## Frequently asked questions

### What is the difference between a 503A and a 503B pharmacy?

A 503A pharmacy compounds for identified patients with a valid prescription and is exempt from CGMP rules. A 503B outsourcing facility registers with FDA, must follow CGMP and is inspected by FDA on a risk-based schedule [1, 3, 4].

### Can a 503B outsourcing facility compound without a prescription?

Yes. FDA says outsourcing facilities may distribute drugs on a patient-specific prescription or on an order from a health care provider, such as a hospital, for office stock [3].

### Are compounded drugs FDA approved?

No. FDA does not review compounded drugs for safety, effectiveness or quality before they reach patients [3].

### Who inspects 503A pharmacies?

Section 503A applies to state-licensed pharmacies and licensed physicians, and it exempts their compounded drugs from federal CGMP rules. Outsourcing facilities, by contrast, are inspected by FDA on a risk-based schedule [1, 3].

### Can a 503B facility use any FDA-approved drug ingredient?

No. An outsourcing facility may compound from a bulk substance only if it is on the 503B bulks list or the drug is on FDA's drug shortage list at the time [2, 6].

### Did FDA decide to keep semaglutide off the 503B bulks list?

FDA proposed on May 1, 2026 not to include semaglutide, tirzepatide and liraglutide, and extended comments to July 30, 2026. That notice is a proposal, not a final decision [8, 9].

## Sources

1. [21 U.S.C. 353a (FD&C Act section 503A), U.S. Code 2024 edition (govinfo)](https://www.govinfo.gov/content/pkg/USCODE-2024-title21/html/USCODE-2024-title21-chap9-subchapV-partA-sec353a.htm)
2. [21 U.S.C. 353b (FD&C Act section 503B), U.S. Code 2024 edition (govinfo)](https://www.govinfo.gov/content/pkg/USCODE-2024-title21/html/USCODE-2024-title21-chap9-subchapV-partA-sec353b.htm)
3. [FDA: Human Drug Compounding Laws](https://www.fda.gov/drugs/human-drug-compounding/human-drug-compounding-laws)
4. [FDA: Information for Outsourcing Facilities](https://www.fda.gov/drugs/human-drug-compounding/information-outsourcing-facilities)
5. [FDA: Bulk Drug Substances Used in Compounding Under Section 503A](https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding-under-section-503a-fdc-act)
6. [FDA: Bulk Drug Substances Used in Compounding Under Section 503B](https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding-under-section-503b-fdc-act)
7. [FDA: 503B Bulk Drug Substances List](https://www.fda.gov/drugs/human-drug-compounding/503b-bulk-drug-substances-list)
8. [Federal Register: 503B clinical need list notice on semaglutide, tirzepatide and liraglutide (May 1, 2026)](https://www.federalregister.gov/documents/2026/05/01/2026-08552/list-of-bulk-drug-substances-for-which-there-is-a-clinical-need-under-section-503b-of-the-federal)
9. [Federal Register: extension of comment period (June 26, 2026)](https://www.federalregister.gov/documents/2026/06/26/2026-12937/list-of-bulk-drug-substances-for-which-there-is-a-clinical-need-under-section-503b-of-the-federal)
10. [Regulations.gov: Docket FDA-2018-N-3240, 503B clinical need list](https://www.regulations.gov/docket/FDA-2018-N-3240)
11. [FDA: Notice to compounders on changes that affect compounding as of March 23, 2020](https://www.fda.gov/drugs/human-drug-compounding/notice-compounders-changes-affect-compounding-march-23-2020)
12. [eCFR: 21 CFR 216.23, the 503A bulks list](https://www.ecfr.gov/current/title-21/chapter-I/subchapter-C/part-216/subpart-B/section-216.23)
13. [FDA: Concerns with unapproved GLP-1 drugs used for weight loss](https://www.fda.gov/drugs/drug-alerts-and-statements/fdas-concerns-unapproved-glp-1-drugs-used-weight-loss)

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