One Year Later: Lessons in Compounding Compliance

Overview of the Regulatory Action

The RealClearHealth commentary "One Year Later: Lessons in Compounding Compliance" arrives at a natural inflection point for the pharmacy compounding industry, marking roughly twelve months since the U.S. Food and Drug Administration's determination that the national shortage of semaglutide—the active ingredient in Novo Nordisk's Ozempic and Wegovy—had been resolved. That determination, and the parallel resolution of the tirzepatide shortage affecting Eli Lilly's Mounjaro and Zepbound, triggered a cascade of enforcement deadlines for compounding pharmacies and outsourcing facilities that had spent nearly two years producing compounded versions of these GLP-1 receptor agonists under the shortage exception built into federal law.

For much of 2023 and 2024, compounders operating under Sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FDCA) were permitted to prepare patient-specific and office-use versions of semaglutide and tirzepatide precisely because the FDA's drug shortage list confirmed that commercial manufacturers could not meet market demand. Once FDA removed these drugs from the shortage database—semaglutide in late 2024 and tirzepatide somewhat earlier—the statutory predicate for shortage-based compounding evaporated, forcing thousands of pharmacies to wind down production under tight enforcement discretion windows. One year on, the industry is now assessing which compliance strategies held up, which compounders faced enforcement action, and what the episode signals about FDA's broader posture toward peptide compounding.

Legal Framework and Authority

The statutory backbone of this entire episode is the Drug Quality and Security Act of 2013 (DQSA), enacted in the aftermath of the New England Compounding Center meningitis outbreak that killed over 100 patients. The DQSA amended the FDCA to create two distinct compounding pathways: Section 503A, governing traditional compounding pharmacies that prepare patient-specific prescriptions and are primarily regulated by state boards of pharmacy, and Section 503B, which established a voluntary category of "outsourcing facilities" subject to direct FDA oversight, current Good Manufacturing Practice (cGMP) requirements, and mandatory adverse event reporting.

Both pathways contain an "essentially a copy" prohibition, barring compounders from producing versions of drugs that are essentially copies of FDA-approved commercial products—except when that approved product appears on FDA's drug shortage list. This shortage exception is what legally permitted mass compounding of semaglutide and tirzepatide. Separately, Section 503A requires that any bulk drug substance used in compounding either appear on FDA's official 503A Bulk Drug Substances List or meet United States Pharmacopeia (USP) monograph standards; substances lacking adequate safety data can be excluded outright, a mechanism FDA has used with increasing frequency for novel peptides such as BPC-157, thymosin beta-4, and various growth-hormone-releasing peptides nominated by industry stakeholders but flagged by FDA's Pharmacy Compounding Advisory Committee (PCAC) for insufficient toxicological data.

When the shortage exception lapsed, FDA reverted to standard enforcement posture: compounded semaglutide and tirzepatide once again became "essentially copies" of approved drugs and therefore unlawful to compound outside narrow patient-specific exceptions (e.g., allergy to an inactive ingredient, or a documented clinical need for a different dosage form). FDA issued compliance guidance giving 503A pharmacies and 503B outsourcing facilities staggered wind-down periods—generally 60 to 90 days—to cease production and exhaust existing supply.

Industry Implications

The peptide compounding sector, which had expanded rapidly to meet consumer demand for lower-cost GLP-1 alternatives, faced significant contraction once enforcement discretion ended. Some outsourcing facilities pivoted toward compounding other peptides not subject to shortage designations, including various investigational or research-use peptides, raising fresh questions about whether such products meet the statutory definition of compounding a legitimate drug versus manufacturing an unapproved new drug under Section 505 of the FDCA.

Litigation has shaped much of this year's landscape. The Outsourcing Facilities Association and individual compounders challenged FDA's shortage-resolution determinations in federal court, arguing the agency's process for confirming resolved shortages was inadequately transparent and failed to account for regional supply gaps. While courts have generally deferred to FDA's technical shortage determinations under the Administrative Procedure Act's arbitrary-and-capricious standard, the litigation exposed friction between commercial manufacturers—who lobbied aggressively for shortage delistings—and compounders who argued patient access still depended on their products, particularly for patients unable to afford brand-name GLP-1s priced above $1,000 monthly without insurance coverage.

Compliance Considerations

Practitioners emerging from this cycle point to several durable lessons. First, reliance on shortage status as a long-term business model is inherently fragile; compounders who diversified into FDA-permitted bulk substances or maintained rigorous patient-specific documentation fared better under scrutiny than those operating high-volume, non-patient-specific production resembling commercial manufacturing. Second, state boards of pharmacy have become more active partners in enforcement, often coordinating with FDA field offices to inspect 503A facilities for compliance with USP Chapter 795 and 797 sterility and non-sterility standards.

Third, outsourcing facilities registered under 503B have faced heightened cGMP inspection scrutiny, with FDA issuing Form 483 observations to several facilities for inadequate stability testing and impurity profiling of compounded semaglutide salts—an issue distinct from the shortage question but emblematic of broader quality concerns FDA has raised about salt forms (e.g., semaglutide sodium or acetate) that differ from the FDA-approved base compound.

Looking Ahead

Several developments bear watching. FDA's PCAC continues to evaluate nominated peptides for the 503A bulk substances list, and additional exclusions are plausible given the agency's stated concerns about immunogenicity and insufficient long-term safety data for many popular research peptides. Congress has also shown renewed interest in compounding oversight, with proposals to tighten the "essentially a copy" exception and require more granular FDA reporting on shortage determinations.

Meanwhile, commercial manufacturers are expected to continue pressing FDA to resist reinstating shortage designations, while patient advocacy groups warn that affordability gaps—not manufacturing capacity alone—continue to drive demand for compounded alternatives. As RealClearHealth's retrospective suggests, the past year has functioned as a real-world stress test of the DQSA framework, revealing both its capacity to protect patients from substandard products and its limitations in addressing the underlying economic pressures that fuel demand for compounding in the first place. Further guidance, litigation, or legislative action within the coming year appears likely, particularly as GLP-1 demand shows no sign of abating.