503A covers pharmacy prescriptions; 503B covers FDA-registered facilities
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Key findings
- Section 503A lifts three FD&C Act requirements, including CGMP, for a drug compounded by a licensed pharmacist or physician for an identified patient on a valid prescription.
- Section 503B lifts a different three. CGMP is not one of them: FDA says outsourcing facilities "are subject to CGMP requirements" and are inspected on a risk-based schedule.
- Both sections bar copies of approved drugs. Under 503A, FDA's 2018 guidance says it does not intend to act against a compounder filling four or fewer prescriptions a month for a copy.
- Neither statute, read in full on October 19, 2026, contains the word "research." A research-use-only label is not a route into either section.
Federal drug law has two compounding sections, and they cover two different kinds of business. Section 503A is for a licensed pharmacist or physician making a drug for a named patient on a prescription. Section 503B is for an outsourcing facility that has registered with FDA and follows the federal manufacturing quality rules known as CGMP.
Coverage that says "compounding is legal" without naming the section leaves out the conditions, and the conditions are the whole law. A seller that meets the conditions of neither section gets the exemptions of neither.
What section 503A covers
Section 503A covers a drug made for one identified patient. The statute is 21 U.S.C. 353a (read on law.cornell.edu on October 19, 2026). Its subsection (a) says three requirements "shall not apply to a drug product if the drug product is compounded for an identified individual patient based on the receipt of a valid prescription order."
The compounder must be "a licensed pharmacist in a State licensed pharmacy or a Federal facility," or a licensed physician. Subsection (a)(2) allows small batches made before a prescription arrives, but only "in limited quantities" and based on a history of valid prescriptions received.
FDA's page "Human Drug Compounding Laws" (content current as of December 17, 2024, read October 19, 2026) names the three requirements lifted: FDA approval before marketing, current good manufacturing practice (CGMP), and labeling with adequate directions for use. It states the condition in one line: "the drugs must be compounded based on the receipt of valid patient-specific prescriptions."
No prescription, no exemption. That is the part most often dropped.
What section 503B covers
Section 503B covers a facility, not a prescription. It was added by the Drug Quality and Security Act, which FDA's laws page says was enacted on November 27, 2013. The statute is 21 U.S.C. 353b (read on law.cornell.edu on October 19, 2026).
Its subsection (d)(4) defines an outsourcing facility as a facility at one address that compounds sterile drugs, has elected to register, and meets every requirement of the section. Two lines in that definition separate it from 503A. "An outsourcing facility is not required to be a licensed pharmacy." And it "may or may not obtain prescriptions for identified individual patients."
Registration is yearly. Subsection (b) has a facility register on electing to become one and again each year between October 1 and December 31. FDA must post the list. Its "Registered Outsourcing Facilities" page (content current as of October 13, 2026, read October 19, 2026) is updated weekly and shows each facility's registration dates, last inspection and whether a Form 483 was issued.
The price of that wider reach is oversight. FDA's laws page says: "Unlike compounders operating under section 503A, outsourcing facilities are subject to CGMP requirements." Its page "Information for Outsourcing Facilities" (content current as of March 29, 2022, read October 19, 2026) adds that they are inspected "according to a risk-based schedule," must report adverse events, and must send FDA a list of drugs compounded every six months.
The statute also sets label wording. A 503B drug must carry "This is a compounded drug." or a comparable statement, and "Not for resale."
Which requirements each section lifts
The two sections each switch off three provisions, and only two of the three overlap. The statute text uses U.S. Code numbers; the table gives both.
| Requirement | Section 503A | Section 503B |
|---|---|---|
| FDA approval before marketing (FD&C Act 505, 21 U.S.C. 355) | Lifted | Lifted |
| Labeling with adequate directions for use (502(f)(1), 21 U.S.C. 352(f)(1)) | Lifted | Lifted |
| CGMP (501(a)(2)(B), 21 U.S.C. 351(a)(2)(B)) | Lifted | Applies |
| Drug supply chain requirements (21 U.S.C. 360eee-1) | Not named in 503A | Lifted |
| Who compounds | Licensed pharmacist in a state-licensed pharmacy or federal facility, or a licensed physician | A registered outsourcing facility, under a licensed pharmacist's direct supervision |
| Prescription for a named patient | Required | "May or may not" be obtained |
Read the CGMP row twice. A 503A pharmacy is exempt from the federal manufacturing standard as long as it meets the conditions of 503A. A 503B facility is held to that standard and inspected against it.
The essentially-a-copy condition
Both sections stop compounding from turning into unapproved copies of approved drugs. The wording differs.
Under 503A, subsection (b)(1)(D) bars a compounder from making, "regularly or in inordinate amounts," drugs that are "essentially copies of a commercially available drug product." Subsection (b)(2) carves out a change made for one patient that produces "a significant difference," as the prescriber determines.
FDA explains how it reads those words in its final guidance "Compounded Drug Products That Are Essentially Copies of a Commercially Available Drug Product Under Section 503A" (January 2018, read October 19, 2026). A product counts as commercially available if it is marketed. It does not count if it has been discontinued or is listed as currently in shortage on FDA's drug shortage list. On the "regularly or in inordinate amounts" test, the guidance sets an enforcement policy: "at this time FDA does not intend to take action" against a compounder that fills four or fewer prescriptions for a copy in a calendar month. A prescription that records the significant difference, such as "No Dye X, patient allergy," does not count toward the four.
Under 503B, condition (a)(5) is shorter: "The drug is not essentially a copy of one or more approved drugs." Subsection (d)(2) defines the term to include a drug "identical or nearly identical to an approved drug." FDA issued a separate final guidance on the 503B version on the same date, January 18, 2018, according to its "Human Drug Compounding Policies and Rules" page (content current as of September 9, 2026, read October 19, 2026).
The stake is the exemption itself. A copy that fails this condition is outside the section, so the approval requirement applies to it again.
Why a research-use-only storefront fits neither
Both sections are built on conditions about who makes the drug and for whom. 503A needs a licensed pharmacist or physician and a prescription for an identified patient. 503B needs a registered outsourcing facility that follows CGMP, pays its fees and labels its products as compounded drugs.
A label reading "for research use only" supplies none of that. It is not a prescription and it is not a registration. Neither statute, read in full on October 19, 2026, contains the word "research," so there is no third compounding lane for research sale in either text.
The practical test is narrow and checkable. A seller claiming 503B status should appear on FDA's registered outsourcing facilities list. A seller claiming 503A status should be a state-licensed pharmacy dispensing on prescriptions. A seller claiming neither is not operating under either section, whatever its product page says about compounding.
Limitations
This piece reads the statute and FDA's own pages and guidance. It is not legal advice and says nothing about how a court has applied either section. FDA's guidance documents are marked "Contains Nonbinding Recommendations," so they state the agency's current thinking, not the law. The outsourcing facilities page read here carries a content date of March 29, 2022. State pharmacy law, which governs much of 503A practice, was not read. Other 503A and 503B conditions, including the rules on bulk drug substances and the 503B fee schedule, are not covered here.
Two sections, two sets of conditions. A business that meets neither is not compounding under federal law, and the label on the vial does not change that.
Sources
All read 2026-10-19. 21 U.S.C. 353a, Pharmacy compounding, subsections (a), (b)(1)(D) and (b)(2), read on law.cornell.edu. 21 U.S.C. 353b, Outsourcing facilities, subsections (a), (a)(5), (b), (d)(2) and (d)(4), read on law.cornell.edu. 21 U.S.C. 360eee-1, Requirements (pharmaceutical distribution supply chain), section heading read on law.cornell.edu. FDA, Human Drug Compounding Laws, content current as of 2024-12-17. FDA, Information for Outsourcing Facilities, content current as of 2022-03-29. FDA, Registered Outsourcing Facilities, content current as of 2026-10-13. FDA, Human Drug Compounding Policies and Rules, content current as of 2026-09-09. FDA, Compounded Drug Products That Are Essentially Copies of a Commercially Available Drug Product Under Section 503A of the Federal Food, Drug, and Cosmetic Act, Guidance for Industry, January 2018, sections III.A, III.B.2 and III.B.4.
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