Last Updated: January 2026

When Is Compounding Necessary? Understanding Legitimate Medical Reasons for Compounded Medications

Pharmaceutical compounding has been a cornerstone of medicine for centuries—pharmacists have always prepared customized medications when commercially available options don't meet patient needs. But in today's world of precision manufacturing and FDA oversight, when is compounding actually necessary?

This question has become particularly relevant with the rise of compounded GLP-1 medications like semaglutide and tirzepatide. Understanding the legitimate medical—and legal—reasons for compounding helps patients make informed decisions and avoid unnecessary risks.

What Is Pharmaceutical Compounding?

Pharmaceutical compounding is the process of preparing customized medications by combining, mixing, or altering ingredients to create a medication tailored to an individual patient's needs.

Compounding differs from drug manufacturing in several key ways:

The 6 Legitimate Medical Reasons for Compounding

According to the FDA and medical practice standards, compounding is considered medically necessary in the following situations:

1. Drug Shortages

This is the most straightforward reason for compounding. When an FDA-approved drug isn't commercially available due to manufacturing issues, supply chain disruptions, or demand spikes, compounding provides an alternative. The FDA's drug shortage list determines when this exemption applies.

Important: Once a shortage is resolved, this justification no longer applies. The FDA removed semaglutide from the shortage list in February 2025 and tirzepatide in October 2024.

2. Allergies to Inactive Ingredients

FDA-approved drugs contain inactive ingredients (excipients) like:

• Dyes and colorings
• Preservatives (benzyl alcohol, parabens)
• Fillers (lactose, corn starch)
• Binders and coatings

Patients with documented allergies to these ingredients may legitimately need a compounded version that excludes the problematic component. Documentation of the allergy is essential.

3. Need for Different Dosage Strength

Commercial medications come in standardized doses. When a patient needs:

• A dose smaller than available (often pediatric patients)
• A dose between available strengths
• A specific dose for titration purposes

Compounding may be appropriate. However, this does NOT mean any arbitrary dose difference justifies compounding—the medical need must be documented.

4. Alternative Dosage Form

Patients may need medications in forms different from what's commercially available:

• Liquids for patients who can't swallow pills
• Topical preparations for localized treatment
• Suppositories for patients who can't take oral medications
• Troches or lozenges for absorption through oral mucosa
• Transdermal gels for steady absorption

5. Discontinued Medications

Pharmaceutical companies sometimes discontinue drugs that aren't profitable enough, even when patients rely on them. Compounding can preserve access to these medications when no commercial alternative exists.

6. Combination Medications

When no commercial combination product exists, compounding can create multi-drug preparations to improve patient adherence and simplify medication regimens.

The Legal Framework: FDCA Section 503A and 503B

Federal law establishes when compounding is legally permitted:

The "Essentially a Copy" Question

This is where things get complicated, especially for GLP-1 medications.

Under federal law, compounders generally cannot make an "essentially a copy" of a commercially available drug. An "essentially a copy" means:

• Same active ingredient
• Same dosage form (injection, tablet, etc.)
• Same strength
• Same route of administration

Exception: Compounding is permitted during FDA-designated drug shortages.

The "Significant Difference" Argument

Some compounders continue making GLP-1 medications by claiming their products have a "significant difference" from commercial versions, such as:

• Added vitamin B12 or L-carnitine
• Different dosage strengths
• Combined with other ingredients

However, the FDA has warned that "pretextual differences" created solely to evade the essential copy prohibition may not satisfy legal requirements. In September 2025, FDA issued 50+ warning letters to GLP-1 compounders for various violations.

When Is Compounding NOT Necessary?

Compounding is generally not medically necessary when:

1. An FDA-approved alternative exists at the needed dose and form, and the patient has no documented allergy or medical need for customization
2. The primary motivation is cost savings — lower price alone does not constitute medical necessity
3. There's no documented clinical rationale — vague claims of "personalization" without specific medical justification
4. The drug is readily available — no shortage exists and supply meets demand

Applying This to GLP-1 Medications

Let's apply these principles specifically to semaglutide and tirzepatide:

When Compounded GLP-1s MAY Be Appropriate

• Documented allergy to an inactive ingredient in Ozempic, Wegovy, Mounjaro, or Zepbound
• Medical need for a dose not commercially available (with documented clinical rationale)
• Medical need for a different form (though efficacy of alternative forms is less established)

When Compounded GLP-1s Are NOT Medically Necessary

• Cost savings — not a medical reason
• Convenience — not a medical reason
• Insurance denial — a coverage issue, not a medical issue
• Added vitamins — B12 or L-carnitine can be taken separately; adding them doesn't create medical necessity

The Current Reality

As of January 2026:

• Semaglutide and tirzepatide are no longer in shortage
• Brand-name pricing has dropped significantly (Wegovy $199-349/month, Zepbound $299-449/month)
• Medicare coverage begins mid-2026 (~$50/month copay)
• Oral Wegovy approved December 2025 ($149/month)
• FDA is actively enforcing against compounders making "essentially a copy"

For most patients, the medical necessity argument for compounded GLP-1s has become increasingly difficult to support.

Questions to Ask Your Healthcare Provider

If you're considering compounded medications, discuss these questions with your doctor:

1. "Is there an FDA-approved alternative that would work for me?"
2. "What specific medical need does compounding address that commercial options cannot?"
3. "Do I have a documented allergy to ingredients in the brand-name version?"
4. "What are the safety tradeoffs of using a compounded versus FDA-approved drug?"
5. "Is the compounding pharmacy PCAB-accredited or a 503B facility?"

The Risk-Benefit Calculation

Every medical decision involves weighing risks and benefits. For compounded medications:

Potential Benefits

• Access when allergies prevent use of commercial products
• Customized dosing for specific medical needs
• Alternative forms when standard forms aren't tolerated
• Access during genuine shortages

Potential Risks

• No FDA review of safety or efficacy
• Potency may vary between batches (FDA has found 42-170% variation)
• Different inactive ingredients with unknown safety profiles
• Less regulatory oversight (especially 503A pharmacies)
• No adverse event reporting requirement for many compounders
• Legal uncertainty in current regulatory environment

The Bottom Line

Pharmaceutical compounding serves important medical purposes. It exists to solve real clinical problems that commercially available drugs cannot address—allergies to excipients, need for specific doses or forms, and medication shortages.

However, compounding is not meant to be a generic alternative to FDA-approved drugs. When the primary motivation is cost savings rather than documented medical necessity, patients take on additional risks without the safety assurances of FDA oversight.

If you're considering compounded medications, have an honest conversation with your healthcare provider about whether compounding is necessary for your situation—or simply desired. The answer to that question should guide your decision.

Sources

• FDA: Compounding and the FDA - Questions and Answers
• Federal Food, Drug, and Cosmetic Act, Sections 503A and 503B
• FDA Drug Shortage Database
• USP Chapter <797> Pharmaceutical Compounding—Sterile Preparations
• American Society of Health-System Pharmacists (ASHP) Guidelines on Compounding
• FDA Warning Letters to GLP-1 Compounders, September 2025