The pharmacy landscape has undergone a dramatic shift in recent years. This is largely due to a 2012 fungal meningitis outbreak that took 64 lives and injured another 751 across the United States. The culprit? A New England-based 797 Compounding Pharmacy that produced and distributed contaminated medications. Subject only to periodic general inspections by the Board of Pharmacy, compounding pharmacies do not meet the same protocols, sterility, and potency testing as FDA-registered facilities. The result is cheaper medications for purchasers and windfall profits for Compounding Pharmacies—all at the expense of patient safety.


To help protect patients, the federal government recently passed the Drug Quality and Security Act prohibiting healthcare practices and institutions from ordering sterile medications in bulk from any 503A compounding pharmacy. This legislation led to the formation of 503B specialty outsourcing pharmacies. Regulated by the FDA, this new breed of pharmacy is held to the same FDA-approved common good manufacturing process (cGMP) protocols as large pharmaceutical manufacturers. As such, they are permitted to sell medications to healthcare practices and institutions without patient-specific prescriptions and are free to back-order medications.

Outsourcing vs. Compounding

503B Outsourcing Facility

503A Compounding Pharmacy

Registered with the Food and Drug Administration YES NO
Follow cGMP (Current Good Manufacturing Practices) YES NO
Provide office use sterile medications without patient specific scripts YES NO
Daily environmental testing YES NO
Extensive testing for sterility and potency of products YES NO
Equipment/Supplies routinely validated and calibrated for accuracy YES NO
Under FDA regulatory authority YES NO
Detailed labels to help reduce medical errors YES NO
Extensive reporting required by FDA YES NO