The Drug Quality and Security Act (DQSA) of 2013 created two distinct compounding frameworks — 503A and 503B — with fundamentally different regulatory requirements.
503A — traditional compounding pharmacies
503A pharmacies compound based on individual patient prescriptions. They are primarily regulated by state boards of pharmacy (not FDA) and must comply with USP compounding standards. They cannot compound in advance of receiving a prescription (except in limited quantities) and cannot distribute beyond their state without restrictions.
503B — outsourcing facilities
503B outsourcing facilities are FDA-registered and subject to FDA CGMP standards. They can compound without patient-specific prescriptions, in large quantities, and distribute across state lines to healthcare facilities. They are subject to FDA inspections.
The registration decision
Pharmacies that want to supply hospitals or health systems at scale typically register as 503B outsourcing facilities. Traditional retail compounding stays under 503A.
State requirements layer on top
Even 503B facilities must comply with state law in states where they ship. States can impose additional requirements on both 503A and 503B compounders independently of FDA oversight.
Shortage compounding
503B facilities can compound copies of FDA-approved products when those products are on FDA’s drug shortage list. For pharmacists working with shortage medications, knowing which framework applies is critical. Verify current shortage compounding requirements with FDA and your state board.