Compounding pharmacies have been grabbing headlines in recent months, particularly in the wake of shortages of weight loss drugs such as semaglutide (Wegovy). These specialized pharmacies are also becoming a go-to option for patients seeking lower-cost alternatives for hormone replacement therapy and erectile dysfunction drugs.

"Patients should only turn to a compounding pharmacy when they can’t get the medication they need from a commercial pharmacy," said Steve Simons, MD, medical director in the Department of Medical Affairs at Cedars-Sinai, which oversees medication safety.

A compounding pharmacy creates customized medications that aren’t available from traditional commercial pharmacies. They’re authorized under the Federal Food, Drug, and Cosmetic Act to prepare medications tailored to individual patient needs, such as a specific dose or a formulation that’s easier to take (say, a liquid version of a pill for a patient who has trouble swallowing).

"Compounding pharmacies are not allowed to make copies of commercially available drugs unless there’s a drug shortage and the U.S. Food and Drug Administration (FDA) permits compounding pharmacies to fill the gap," said Rita Shane, PharmD, chief pharmacy officer at Cedars-Sinai.

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Generic medications and compounded drugs are entirely separate categories of medications. Generic medications are FDA-approved versions of brand-name drugs that meet strict standards for safety, efficacy and purity. Compounded medications, on the other hand, are not FDA-approved. They’re made from FDA-approved ingredients but don’t go through the same rigorous testing and regulation.

There are several reasons a doctor might prescribe a compounded drug:

• The commercially available version doesn’t come in the right dose.
• The patient is allergic to a common ingredient, such as lactose or peanut oil.
• The medication only comes in pill form, and the patient needs a liquid.
• The treatment involves a combination of drugs that must be mixed specifically for the patient.

A drug shortage—like the recent Wegovy shortage—is another scenario where compounding pharmacies step in. In these cases, the FDA may allow them to create temporary alternatives using approved ingredients supplied by manufacturers.

Patients often have misconceptions about bioidentical hormones.

"Many people think bioidentical hormones are only available through compounding pharmacies," said Sharon Winer, MD, a reproductive endocrinologist at Cedars-Sinai. "In fact, bioidentical hormones are also commercially available through FDA-approved pharmacies. So, if your doctor prescribes compounded bioidentical hormones, ask whether a commercially available version might meet your needs."

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All compounding pharmacies must be licensed by their state’s pharmacy board and follow guidelines set by the U.S. Pharmacopeia, a nonprofit organization that partners with the FDA to ensure medication quality.

In addition, a special category of compounding pharmacies called outsourcing facilities was created in 2013 under the Drug Quality and Security Act. The FDA inspects these facilities according to a risk-based schedule, and they’re subject to similar quality standards as commercial manufacturers.

Since compounded drugs aren’t FDA-approved, there’s no centralized oversight of their safety, effectiveness or quality.

"State pharmacy boards do regulate compounding pharmacies, but it’s not the same level of oversight you get with FDA-approved medications," Simons said.

Here are a few key concerns:

• Inconsistent dosing: Since these pharmacies make their medications in small batches without stringent quality-control measures, they may not contain the ingredients—or dose—you think they do.
• Instructions: FDA-approved medications are required to provide patients with detailed instructions and information about side effects, but compounded drugs do not have to include package inserts with this information. “Some medications don’t even include instructions,” Simons said.
• Shelf life: Compounded drugs may degrade faster than their commercial counterparts—and expiration dates aren’t always included on the label.
• Insufficient warning labels: Compounding pharmacies are not required to list adverse effects, so the lack of reported side effects on the packaging does not mean that side effects do not occur.
• Ingredients: Compounding pharmacies may add inactive ingredients to the compounded drug formulation, including stabilizers, preservatives, dyes and binding materials that may cause allergies or side effects.  

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If your doctor recommends a compounded drug, choose your pharmacy carefully.

Winer only works with pharmacies run by professionals with proper certifications. “Some compounding pharmacies maintain extremely high standards—on par with FDA-approved medications,” she said.

Here’s how to vet a compounding pharmacy:

• Check for accreditation: Look for certification from the Pharmacy Compounding Accreditation Board.
• Ask questions: Find out if they’re licensed in your state, if their pharmacists are board-certified in sterile compounding, and whether they use third-party labs to test their products.
• Verify online pharmacies: Use the National Association of Boards of Pharmacy website to see if an online pharmacy meets safety and quality standards.
• Visit the FDA website for Form 483. These forms are inspection reports that flag possible violations found during FDA facility inspections.

Are you turning to a compounded pharmacy because of cost? First, explore cost-savings options for conventional drugs, such as GoodRx, manufacturer discounts and lower-cost retailers like Cost Plus Drugs.

"Patients should only use compounding pharmacies when their medication needs cannot be met by an FDA-approved drug," said Shane. "Unnecessary use of compounding pharmacies can pose serious health risks, including drug quality and potency issues that can harm patients."