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What Is a 503B Pharmacy?

Article Summary

503B pharmacies produce bulk custom medications for healthcare facilities, adhering to FDA regulations ensuring quality and safety standards. They complement 503A compounding pharmacies, collectively enhancing patient access to tailored treatments.

What Is a 503B Pharmacy?

503B pharmacies (officially known as outsourcing facilities) are establishments that create custom medications in large batches for hospitals, doctors’ offices and other healthcare institutions. These medications are administered by healthcare providers in hospitals or clinics, which is why they’re sometimes called “office-use medications.” An example of this is a sterile medicine that is injected during a patient’s visit to their doctor.

The process of making custom medications is called compounding. It is outlined in Section 503A and Section 503B of the U.S. Food, Drug and Cosmetic Act (FD&C Act), and it plays an essential role in healthcare by helping patients whose needs are not met by commercial drugs. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Compounding and the FDA: questions and answers; [reviewed 2022 Jun 29; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/human-drug-compounding/compounding-and-fda-questions-and-answers While pharmaceutical compounding is a practice that is thousands of years old, outsourcing facilities use modern technology and quality systems to formulate, prepare and distribute medicine.

The FDA regulates 503B outsourcing facilities by inspecting them and holding them to high quality standards, similar to large drug manufacturers. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Information for outsourcing facilities; [reviewed 2022 Mar 29; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/human-drug-compounding/information-outsourcing-facilitiesU.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Facts about the current good manufacturing practices (CGMPs); [reviewed 2021 Jun 1; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/pharmaceutical-quality-resources/facts-about-current-good-manufacturing-practices-cgmps Additionally, the FDA determines which drugs can be compounded by these facilities. The active pharmaceutical ingredients that outsourcing facilities use to compound medications also come from FDA-registered manufacturers. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Bulk drug substances used in compounding under Section 503B of the FD&C Act; [reviewed 2020 Feb 20; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding-under-section-503b-fdc-act

Despite the term “503B pharmacy,” outsourcing facilities do not have to be licensed pharmacies, though the drugs they compound must be made by a licensed pharmacist or under their supervision. Outsourcing facilities also do not have to obtain prescriptions for individual patients as typical pharmacies do. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Facility definition under Section 503B of the Federal Food, Drug, and Cosmetic Act; 2018 May [cited 2022 Sep 28]. Available from: https://www.fda.gov/media/97359/download

503B Pharmacy Requirements

For a drug compounder to be a 503B outsourcing facility, they must:

  • Register with the FDA as an official outsourcing facility
  • Compound sterile drugs (though they may compound nonsterile drugs as well)
  • Adhere to all the requirements of Section 503B of the FD&C Act U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Facility definition under Section 503B of the Federal Food, Drug, and Cosmetic Act; 2018 May [cited 2022 Sep 28]. Available from: https://www.fda.gov/media/97359/download

This allows 503B facilities to compound medications and distribute them to healthcare providers without having to submit those medications for FDA review and approval. However, complying with Section 503B means that outsourcing facilities must meet the FDA’s stringent manufacturing standards, which are known as current good manufacturing practices (CGMPs); report all medications that they compound to the FDA; and report any adverse events related to their medications to the FDA, among other requirements. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Information for outsourcing facilities; [reviewed 2022 Mar 29; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/human-drug-compounding/information-outsourcing-facilities

Why Do 503B Pharmacies Exist?

503B outsourcing facilities play an essential role in the American healthcare system, which is why they are included in federal law — the FD&C Act. They provide custom medications that are not available commercially, giving healthcare practitioners and their patients more treatment options. Patients may need medications in a different strength than what is commercially available, they may need a combination of drugs compounded into a single medication, or they may need medicine that does not have a preservative or allergen that the FDA-approved version contains, among other reasons. Outsourcing facilities can help with these situations.

503B facilities are also crucial because they strengthen the drug supply chain in the United States. While they typically cannot make copies of commercially available drugs, outsourcing facilities can make a commercially available drug if the FDA has documented a shortage of it. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Bulk drug substances used in compounding under Section 503B of the FD&C Act; [reviewed 2020 Feb 20; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/human-drug-compounding/bulk-drug-substances-used-compounding-under-section-503b-fdc-act In this way, 503B facilities can provide healthcare practices with much-needed drug products when they would otherwise be unavailable.

How Are 503B Pharmacies Regulated?

503B outsourcing facilities are primarily regulated by the FDA. They are required to register with the FDA, and the administration holds them to high standards called CGMPs. These are the same standards that commercial drug manufacturers must abide by, and the agency enforces these standards by inspecting 503B facilities to ensure compliance. U.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Information for outsourcing facilities; [reviewed 2022 Mar 29; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/human-drug-compounding/information-outsourcing-facilitiesU.S. Food and Drug Administration [Internet]. Silver Spring (MD): U.S. Food and Drug Administration. Facts about the current good manufacturing practices (CGMPs); [reviewed 2021 Jun 1; cited 2022 Sep 28]. Available from: https://www.fda.gov/drugs/pharmaceutical-quality-resources/facts-about-current-good-manufacturing-practices-cgmps

503B vs. 503A

While both 503B outsourcing facilities and 503A compounding pharmacies generally serve the same purpose — providing custom medications for patients whose needs aren’t met by commercial drugs — there are some significant differences between them Pew [Internet]. Philadelphia: The Pew Charitable Trusts; c1996-2022. What are compounded drugs, and how can they be kept safe?; 2017 Dec 14 [cited 2022 Sep 28]. Available from: https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/12/what-are-compounded-drugs-and-how-can-they-be-kept-safe:

Type of Compounding Prescription Required Regulator Quality Standards
503B Outsourcing Facilities Large quantities for use in healthcare facilities No Primarily FDA FDA CGMP standards
503A Compounding Pharmacies Small quantities for individual patients Yes Primarily state boards of pharmacy Vary by state; generally based on the United States Pharmacopeia (USP)

 

Overall, 503B outsourcing facilities and 503A compounding pharmacies play an essential role in the healthcare system. They provide custom medications for healthcare providers and patients when commercial drugs cannot meet their needs. They also strengthen the U.S. drug supply chain, and they complement each other, with 503B facilities providing bulk custom drugs to healthcare practices for office use and 503A pharmacies providing custom medicine to individual patients with prescriptions from their doctors. Without either type of compounding facility, many patients around the U.S. would not be able to get the treatment they need.

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