FDA Publishes Proposed Rule on 503A and 503B Compounding

FDA Publishes Proposed Rule on Sections 503A and 503B Compounding


On March 20, 2024, the US Food and Drug Administration (FDA) issued a proposed rule titled Drug Products or Categories of Drug Products that Present Demonstrable Difficulties for Compounding Under Sections 503A or 503B of the Federal Food, Drug, and Cosmetic Act. The proposed rule would establish criteria for listing drug products or categories of drug products (collectively, drugs) that present demonstrable difficulties for compounding (DDC Lists). Drugs that appear on the DDC Lists may not be compounded under Section 503A or 503B. The new proposed rule comes on the heels of increased interest in compounding semaglutide and related products, indicating the FDA’s interest in strengthening its oversight over compounding.


  • The FDA proposes two lists of drug products that are demonstrably difficult for compounding – one for 503A compounding pharmacies and one for 503B outsourcing facilities.
  • The FDA proposes six criteria it would consider before adding drugs to a list: formulation, dosage form, compounding process, delivery system, bioavailability and testing.
  • The FDA proposes adding three categories to both lists: oral solid modified-release drug products that employ coated systems (MRCs), liposome drug products (LDPs) and drug products produced using hot melt extrusion (HMEs).
  • The FDA is accepting comments on the proposed rule until June 18, 2024.

In Depth


Currently, under Sections 503A and 503B, compounded drug products must meet certain conditions to qualify for exemptions from statutory requirements. Under Section 503A, the drug product must be compounded by a licensed pharmacist in a state-licensed pharmacy or federal facility or by a licensed physician to qualify for exemptions from the current good manufacturing practice (CGMP) requirements, the labeling of adequate directions for use requirements, and drug approvals under new drug applications (NDAs) or abbreviated new drug applications (ANDAs).

Under Section 503B, the drug product must be compounded by or under the direct supervision of a licensed pharmacist in an outsourcing facility to qualify for exemptions from the adequate directions for use labeling, approval of drugs under NDAs or ANDAs, and drug supply chain security requirements. However, drug products identified by the US Secretary of Health and Human Services as presenting demonstrable difficulties for compounding may not be compounded under either Section 503A or 503B.

In June 2000, the FDA published a notice in the Federal Register stating that it was developing DDC Lists. The development efforts were suspended because of constitutional challenges to Section 503A’s advertising provisions. In 2013, the FDA received nominations of approximately 70 unique drugs from industry stakeholders and requested nominations again in 2015 and 2017. Throughout this process, the FDA consulted with the Pharmacy Compounding Advisory Committee and developed this proposed rule.


The proposed rule adds two lists for identifying drugs: one for 503A compounders and one for 503B outsourcing facilities. Two lists are contemplated because certain situations could merit inclusion on one list and not the other. For example, where the FDA determines that manufacturing under CGMP is necessary, it may include such product on the 503A list and not the 503B list as manufacturing under CGMP is already required under 503B.

The proposed rule also establishes criteria for evaluating drugs and categories for inclusion on one or both lists.

The Criteria

Under the proposed rule, the FDA would consider the following criteria individually and collectively:

  • Complex formulation
  • Complex drug delivery mechanism
  • Complex dosage form
  • Bioavailability achievement complexity
  • Compounding process complexity
  • Physicochemical or analytical testing complexity

The FDA would consider these criteria, along with the risks and benefits to patients of the compounded products, in determining whether drugs should be added to one or both lists. The FDA also may consider actual or potential risks but does not intend to consider cost and convenience as factors. The FDA provided brief explanations of each of the six criteria:

  • Complex formulation looks to whether the ingredients require certain characteristics to maintain proper performance, such as solid state, chirality, molecular weight, particle size, viscosity or relative proportions.
  • Complex drug delivery mechanism looks to whether the drug requires specific mechanisms for targeted delivery, such as coating or other rate and onset modifying characteristics.
  • Complex dosage form looks to whether the physical dosage form is difficult to achieve or maintain, such as with coated beads, osmotic-controlled release systems and liposomes.
  • Bioavailability looks to the rate and extent of drug product absorption because it may be affected by permeability or solubility.
  • Compounding process looks to the number of steps and interrelated processes involved in the compounding of the drug product.
  • Physicochemical or analytical testing looks to whether specialized analytical instruments or trainings are necessary to evaluate the drug product’s performance.

The Categories

The FDA proposes including the following three drug categories on both lists: MRCs, LDPs and HMEs.

The FDA stated it is not aware of any compounding or marketing of these three proposed categories for human use and expects that the proposed rule will benefit compounders by reducing regulatory uncertainty. Of note, the FDA stated that it considered transdermal or topical delivery products, metered-dose inhalers and dry powder inhalers but determined that these categories would not be included in the proposed rule (though they may be addressed in future rulemaking). As with the six criteria, the FDA provided brief descriptions of the three drug product categories:

  • MRCs refer to products that consist of a drug-containing core enclosed with a polymeric coating to release an active pharmaceutical ingredient (API) at specified rates, patterns or onsets through the gastrointestinal tract to produce systemic, enteric or local action.
  • LDPs refer to products in which the API is generally contained in or intended to be contained in liposomes.
  • HMEs refer to a continuous process operation that achieves molecular mixing of APIs and inactive ingredients at temperatures above their glass transition temperatures and/or melting temperatures within an extruder.


The proposed rule would prohibit the compounding of drugs listed on the DDC Lists. The proposed rule would also establish a process for the FDA to review drugs for inclusion and would create a pathway for stakeholders to submit drugs for consideration to be listed on one or both DDC Lists.

This proposed rule is a continuation of the FDA’s increased focus on regulating the compounding of medications under Sections 503A and 503B, especially in the wake of increased GLP-1 compounding. In February 2024, the FDA issued two warning letters against counterfeit semaglutide manufacturers. Before that, the FDA sent reminder letters to the National Association of Boards of Pharmacy and the Federation of State Medical Boards, bringing attention to inappropriate semaglutide compounding. Outside of GLP-1, the FDA issued a warning about compounded ketamine products in October 2023.

The FDA is likely to continue pursuing regulatory oversight over compounding activities, especially as the compounding landscape of GLP-1 inhibitors continues to evolve. McDermott will continue to monitor for updates regarding this and related rules, notices and publications.

For more information on the FDA’s proposed rule, please contact one of the authors or any other member of McDermott’s Food, Drug & Medical Device Regulatory Practice Group.

Jae Hyun Lee, a law clerk in the New York office, also contributed to this article.