Peptide and compounding law · Updated
503A vs 503B: compounding pharmacies and outsourcing facilities compared
A 503A compounding pharmacy makes a drug for an identified patient on a prescription, is overseen mainly by its state board of pharmacy, and is exempt from federal manufacturing rules. A 503B outsourcing facility registers with the FDA, follows current good manufacturing practice, is inspected by the FDA on a risk-based schedule, pays an annual federal fee ($22,074 for fiscal 2027), and may supply clinics with office stock without patient prescriptions. Both come from the Drug Quality and Security Act of 2013, neither makes FDA-approved drugs, and each may use only certain bulk ingredients.
| Question | 503A pharmacy (or physician) | 503B outsourcing facility |
|---|---|---|
| Statute | 21 U.S.C. 353a | 21 U.S.C. 353b |
| Main regulator | The state board of pharmacy; the FDA inspects for cause | The FDA, plus state licensing |
| Who compounds | A licensed pharmacist in a state-licensed pharmacy or federal facility, or a licensed physician | A licensed pharmacist or someone under direct supervision; the facility need not be a pharmacy and must compound sterile drugs |
| Prescription | Required, for an identified individual patient. Limited compounding ahead of prescriptions (FDA policy: up to a 30-day supply) | Not required: it "may or may not obtain prescriptions" |
| Office stock for a clinic | Not under federal law | Yes, labeled "Office Use Only"; no resale by anyone else |
| Bulk ingredients | USP or NF monograph; component of an approved drug; or the 503A bulks list (6 substances). FDA Category 1 interim policy. HHS draft peptide policy (Oct. 30, 2026) | The 503B clinical-need list (5 substances), or a drug on FDA's shortage list at the time. FDA Category 1 interim policy |
| Copies of approved drugs | Not regularly or in inordinate amounts (FDA: 4 or fewer prescriptions a month), unless the prescriber documents a significant difference | Not at all, unless the drug is in shortage or the prescriber documents a clinical difference |
| Quality standard | Exempt from federal cGMP; USP <795> and <797> and state law | Federal cGMP, 21 CFR parts 210 and 211 |
| FDA registration and fees | None | Registers every October 1 to December 31. FY2027: $22,074 ($7,142 small business); $21,427 per reinspection |
| Reporting to the FDA | No federal product or adverse-event reports | Product reports every June and December; adverse-event reports |
| Interstate shipping | Statute caps out-of-state distribution at 5% unless the state signs an FDA agreement; the FDA is not enforcing the cap, and the agreement has been suspended since 2022 | No federal cap; each state's license applies |
| Label | Set by state rules and USP | "This is a compounded drug.", lot, expiration, "Not for resale" and FDA reporting details |
| Shipping into North Carolina | An NC out-of-state pharmacy permit before shipping "even a single" dispensed drug (21 NCAC 46 .1607) | An NC Department of Agriculture outsourcing facility license, $1,000 a year (NCDA&CS); a Board of Pharmacy permit too if it dispenses prescriptions |
| How many | No federal list; licensed by each state | 98 on the FDA's list as of October 23, 2026, one of them in North Carolina |
Where the two categories come from
Section 503A was added to the Food, Drug, and Cosmetic Act in 1997. After the 2012 meningitis outbreak traced to a Massachusetts compounder, Congress passed the Drug Quality and Security Act on November 27, 2013. Its Title I, the Compounding Quality Act, created section 503B and the "outsourcing facility": a single site that compounds sterile drugs, elects to register with the FDA, and meets every condition of the section.
Neither kind of compounder makes an FDA-approved drug. The FDA says so directly: "Compounded drugs are not FDA-approved" (FDA Q&A). What each section grants is a set of exemptions. A 503A product is exempt from new-drug approval, labeling directions for use and federal manufacturing rules. A 503B product is exempt from approval, directions for use and supply-chain tracing, but not from current good manufacturing practice.
503A: one patient, one prescription
A 503A drug must be "compounded for an identified individual patient based on the receipt of a valid prescription order" (21 U.S.C. 353a(a)). A pharmacy may compound limited quantities ahead of time based on a history of prescriptions; the FDA's interim policy caps that at a 30-day supply. A prescription with no patient name does not meet the requirement, even where a state board allows it (FDA guidance, 2016).
That is why 503A cannot supply office stock. A med spa or clinic that wants vials on the shelf for in-office use needs a 503B outsourcing facility. North Carolina's rule says the same thing from the state side: a pharmacy may supply practitioners for office use only as "applicable federal law" allows (21 NCAC 46 .2801(c)).
503B: FDA registration, cGMP and office use
An outsourcing facility "may or may not obtain prescriptions for identified individual patients" (21 U.S.C. 353b), so it can sell to hospitals and clinics for office use. In exchange it accepts federal oversight: registration each year between October 1 and December 31, current good manufacturing practice under 21 CFR parts 210 and 211, FDA inspection on a risk-based schedule, product reports every June and December, and adverse-event reports. The FDA's 503B-specific manufacturing guidance is still a draft from January 2020.
The annual establishment fee for fiscal 2027 is $22,074, or $7,142 for a small business, and a reinspection costs $21,427 (91 FR 48142). An outsourcing facility may not let anyone else resell its products, and a single site cannot run 503A and 503B operations side by side.
Bulk ingredients: the rule that decides most peptide questions
A 503A pharmacy may compound from a bulk ingredient that has a USP or National Formulary monograph, is a component of an FDA-approved drug, or is on the 503A bulks list. A 503B facility may use a bulk ingredient only if it is on the 503B "clinical need" list or the finished drug is on the FDA's shortage list at the time of compounding, distribution and dispensing. Both lists are short: six substances on the 503A list (21 CFR 216.23) and five on the 503B list, none of them peptides.
Until rulemaking finishes, the FDA's interim policies let compounders use Category 1 substances. On October 30, 2026, HHS published a draft enforcement-discretion policy for 503A compounding with six peptides listed in its Appendix A: BPC-157, epitalon, KPV, MOTS-c, Semax and TB-500 (91 FR 68526; HHS policy). It names state-licensed pharmacies, federal facilities and licensed physicians, and requires a patient-specific prescription, so an outsourcing facility cannot compound those peptides under it and a clinic cannot buy them as office stock. The detail is in Are peptides legal?
Copies of approved drugs: the GLP-1 example
Neither section lets a compounder make what is essentially a copy of an approved drug as a business. Under 503A the bar is compounding copies "regularly or in inordinate amounts"; the FDA's policy treats four or fewer prescriptions a month as acceptable, and a prescriber's documented "significant difference" for a patient takes a prescription outside the count (FDA guidance). Under 503B a copy is barred unless the drug is in shortage or the prescriber documents a "clinical difference".
Compounded semaglutide and tirzepatide show how this works. Pharmacies compounded both while they were in shortage. After the FDA declared the shortages over, its grace periods ended in early March and late April 2025 for 503A pharmacies and on March 19 and May 22, 2025 for outsourcing facilities (FDA), and the Fifth Circuit upheld both decisions on August 27, 2026. In April 2026 the FDA said semaglutide with vitamin B12 is still a copy if both strengths are within 10% of approved products. On May 1, 2026 it proposed keeping semaglutide, tirzepatide and liraglutide off the 503B list; that was not final as of November 2, 2026. See the FDA's 503B proposal.
Shipping across state lines
Section 503A limits a pharmacy in a state without an FDA agreement to distributing out of state no more than 5% of its prescriptions. The FDA's 2020 standard agreement replaced that with a 50% threshold, but the FDA suspended it on October 21, 2022, after a court sent it back for more analysis, and it does not enforce the 5% cap until a new rule is final (87 FR 63947). Only New Hampshire, Colorado and Kentucky ever signed; North Carolina did not. Outsourcing facilities have no federal interstate cap.
State licensing still applies in every case. An out-of-state pharmacy needs a North Carolina permit before it ships a single dispensed prescription into the state, and must tell the Board within five days of any FDA warning letter (21 NCAC 46 .1607). An outsourcing facility shipping into North Carolina needs a license from the Department of Agriculture's Food and Drug Protection Division, $1,000 a year and expiring December 31.
Which one a clinic should buy from
- Patient-specific prescriptions dispensed to the patient: a 503A pharmacy licensed where the patient is, or an out-of-state pharmacy with that state's permit.
- Stock kept in the office and administered on site: a 503B outsourcing facility licensed to ship into the state. A 503A pharmacy cannot lawfully supply it.
- A peptide covered only by the October 30, 2026 HHS policy: a 503A pharmacy, on a patient-specific prescription. Not a 503B facility.
- Before signing a supply agreement: check the FDA's registered outsourcing facility list, the facility's last inspection and any Form 483 or warning letter, and its state licenses.
Common questions
What is the difference between 503A and 503B?
A 503A pharmacy compounds for individual patients on prescriptions and is regulated mainly by its state board. A 503B outsourcing facility registers with the FDA, follows federal manufacturing rules, is inspected by the FDA, and can supply clinics with office stock without patient prescriptions.
Are 503B drugs FDA-approved?
No. Neither 503A nor 503B products are FDA-approved. A 503B facility is registered with and inspected by the FDA, which is different from approval of the drugs it makes.
Can a 503A pharmacy sell to a clinic for office use?
Not under federal law. Section 503A requires a prescription for an identified patient, and the FDA says prescriptions without patient names do not qualify. Office stock should come from a 503B outsourcing facility.
Can a 503B outsourcing facility compound BPC-157?
No. BPC-157 is not on the 503B bulks list, and the October 30, 2026 HHS enforcement policy covers 503A compounding only.
How many 503B outsourcing facilities are there?
98 were on the FDA's registered outsourcing facility list as of October 23, 2026, one of them in North Carolina. The list changes weekly, and facilities that do not re-register by December 31 come off it on January 1.
Does a 503B need a license to ship into North Carolina?
Yes. It needs an outsourcing facility license from the NC Department of Agriculture and Consumer Services, $1,000 a year. If it also dispenses patient prescriptions into the state, it needs a Board of Pharmacy permit as well.
How much does 503B registration cost?
For fiscal 2027 (October 1, 2026 to September 30, 2027) the annual establishment fee is $22,074, or $7,142 for a small business with gross annual sales of $1 million or less. Each reinspection costs $21,427.
Can a 503A pharmacy ship compounded drugs to other states?
Yes, subject to each state's licensing. The federal 5% limit on out-of-state distribution is not being enforced while the FDA's agreement with the states is suspended, and North Carolina never signed that agreement.
Update log
- November 2, 2026. Published. Statutes, FDA lists, guidances and fee notices, and North Carolina rules checked October 30, 2026; the 503B GLP-1 docket and the HHS peptide docket re-checked November 2, 2026, and the HHS policy's Appendix A read on hhs.gov the same day.
Sources
- Drug Quality and Security Act, Pub. L. 113-54 (2013)
- 21 U.S.C. 353a (section 503A)
- 21 U.S.C. 353b (section 503B)
- 21 CFR 216.23 (503A bulks list)
- FDA, 503B Bulk Drug Substances List
- FDA, Prescription Requirement Under Section 503A (guidance, 2016)
- FDA, Compounded Drug Products That Are Essentially Copies (503A guidance, 2018)
- FY2027 outsourcing facility fee rates, 91 FR 48142 (July 30, 2026)
- MOU suspension, 87 FR 63947 (Oct. 21, 2022)
- HHS peptide enforcement discretion policy, 91 FR 68526 (Oct. 30, 2026)
- HHS, the policy with Appendix A (peptides covered), hhs.gov PDF (read November 2, 2026)
- FDA, Registered Outsourcing Facilities (updated October 23, 2026)
- 21 NCAC 46 .2801 (North Carolina compounding rule; Cornell LII copy)
- 21 NCAC 46 .1607 (out-of-state pharmacy permits; Cornell LII copy)
- NCDA&CS Food and Drug Protection Division, drug program licensing
Related
Choosing a compounding source, or setting one up?
DPS Law advises clinics, pharmacies and outsourcing facilities on North Carolina and federal compounding law, from supply agreements to licensing. For another state's board rules, talk to a lawyer licensed in that state.