Dec 17, 2012: What is the law regarding pharmacy compounding versus drug manufacturing?

The recent fungal meningitis outbreak associated with compounded products from the New England Compounding Center (NECC) have led many to question the regulations regarding pharmaceutical compounding. 


Compounding by pharmacies is a traditional practice that has not been regulated by the FDA beyond basic standards.  The FDA, under language from the 1938 Food, Drug and Cosmetic Act, states that medication for which there is a commercially available product cannot be compounded and that compounded medications cannot be “stockpiled”.  In other words, a compounded product must not be otherwise available and must be compounded on an as-needed basis for individual patient prescriptions.  However recent drug shortages have allowed compounding pharmacies to offer medications that would previously have been “commercially available”. 


While some argue the FDA should exert more control over compounding pharmaceuticals,  much of the oversight is up to the individual states if  compounding is done by a pharmacy (as opposed to  a company licensed as a drug manufacturer).  Under federal law, pharmacies that are making large batches of medications (not for individual prescriptions) are required to be licensed and regulated as a drug manufacturer, which NECC was not.


New recommendations recently approved by the Tennessee Board of Pharmacy seek to improve the distinction and regulation between pharmacies doing traditional compounding for individuals and those pharmacies that are doing large-scale compounding.  Highlights of these changes include:

  • Collect information from each licensed pharmacy in Tennessee regarding their compounding activity
  • Prioritize pharmacy inspections based on level of compounding
  • Convert inspection reports to an electronic process

The goal of these recommendations is to collect data and provide inspections based on current statutes. These steps will allow a better understanding of the scope of pharmacy compounding in Tennessee.  However with approximately 10,000 pharmacies in Tennessee and only five inspectors for the Board of Pharmacy, this will be a time-consuming process.


The contamination of methylprednisolone injection from NECC is a tragic public health event.  NECC appears to have been operating as a drug manufacturer by sending large batches of medications that were not based on individual prescriptions.  Hospitals, clinics, physician’s offices and others that order medications should know the source of the product and the regulation/oversight of that product.   Current laws provide control over both pharmaceutical compounding and drug manufacturing.  Compounding facilities must be identified and oversight enforced to provide patient safety.


This question prepared by:  Kim Barker, PharmD, DABAT

Associate Professor

Director of Drug Information

Lipscomb University College of Pharmacy

                                                CSPI, Tennessee Poison Center


I am interested in any questions you would like answered in the Question of the Week.  Please email me with any suggestion at


Donna Seger, MD

Medical Director

Tennessee Poison Center

Poison Help Hotline: 1-800-222-1222