Which compounding pharmacy to use
A guide to evaluating and selecting compounding pharmacy partners for cash-pay practices
In case you prefer to learn via video or audio, check out our YouTube and podcast episodes on evaluating compounding pharmacies!
If you’re starting a medical weight loss or hormone therapy clinic, it’s likely that you’ll need to establish relationships with compounding pharmacies.
We’ll start with some background on compounding pharmacies, and then we’ll offer a tactical approach to evaluating pharmacies and finding a fit.
A brief history of compounding pharmacies
Compounding pharmacies "compound" or mix different ingredients to create a medication. Their primary focus is on customized formulations tailored to a specific patient’s need, but they also make general medications, like semaglutide, especially when a specific dosage or form isn’t commercially available.
Compounding pharmacies have existed for centuries, with origins tracing back to ancient civilizations like Egypt and Greece, where healers would mix herbal remedies. The practice continued through the Middle Ages and into modern times, remaining the primary method of preparing medicines until mass production by pharmaceutical companies began in the 20th century. Despite this shift, compounding pharmacies have persisted and recently gained more attention in a cash-pay medicine world.
Compounding pharmacies are frequently used for GLP-1 medications (semaglutide and tirzepatide, available as tablets or injections), hormone therapies (testosterone, estrogen, and/or progesterone, available as injections, gels, creams, patches, and capsules), and alternative therapies (NAD+ peptides, vitamin injections, vitamin infusions).
It’s worth highlighting that the regulation is quickly evolving. For example, compounding pharmacies are currently allowed to produce and sell GLP-1s because these medications, generally protected by patent, are in extremely short supply. It’s possible that compounding pharmacies will have to cease production of these compounds as more supply comes online. Aside from questions of availability, compounding pharmacies are consistently subject to scrutiny and controversy as it relates to patient safety and quality as well.
As a cash-pay provider, it’s critical to choose a compounding pharmacy that you can trust and that delivers excellent results for your patients. Read on for advice on how to make sure you’re making the right choice.
Key considerations
Inventory
Each pharmacy has its own catalog or formulary. For example, Pharmacy A may have semaglutide, tirzepatide, and testosterone, whereas Pharmacy B only has semaglutide and tirzepatide.
Write out a list of all of the compounded medications you anticipate ordering in the next year. Then, reach out to the compounding pharmacies you are considering and ask for a catalog. They’re more than happy to supply this, usually within just a few hours.
Quality
As it relates to compounding pharmacies, quality is a hot topic. Although compounding pharmacies are less regulated than traditional pharmaceutical manufacturers, there are still standards and indicators that you can rely upon to ensure you are working with a high-quality partner. Here are a few useful proxies:
Type of licensure: Compounding pharmacies can be licensed as 503A and/or 503B facilities. 503A pharmacies are only allowed to create medications for an individual prescription and are regulated primarily by state boards of pharmacy, whereas 503B facilities can produce larger batches without individual prescriptions. As a result, 503B facilities must adhere to stricter FDA regulations. For more information, review the FDA’s Compounding Inspections and Oversight Frequently Asked Questions.
Breadth of licensure: Especially for 503A facilities, it’s preferable to be licensed in a greater number of states. This means the compounding pharmacy is regulated by more state boards, and generally held to a greater number of standards.
Testing: You want a compounding pharmacy that performs full stability, sterility, and potency testing on each batch. They also should be able to provide certificates of analysis.
Beyond Use Date (BUD): BUD is the date or time after which a compounded sterile preparation (CSP) may not be stored or transported and is calculated from the date or time of compounding. Ideally, you’d want compounding pharmacies that have more extended BUDs.
Ingredient procurement: Particularly for individuals focused on health and wellness, the source and composition of medications might be very important. For example, grapeseed oil is often preferred over cottonseed oil in compounded medications due to its lower allergenic potential and healthier fatty acid profile.
Warning letters or violations: Do a quick Google search to see if the compounding pharmacy had any recent warning letters, violations, or failed inspections from the FDA.
Cost
Particularly in a cash-pay context, the amount that compounding pharmacies charge likely plays an important role in your decision. Prices vary a lot, so be sure to shop around.
For example, across 12 popular compounding pharmacies, we found the price per mg for semaglutide to vary from $9 to $70!
Also, be sure to ask about any discounts offered. Some will offer short-term discounts to new clinics, and many will offer volume discounts.
Finally, be sure to consider ancillary costs other than the medication itself. This often includes shipping and supplies (e.g., sharps container, syringes, alcohol pads).
Patient experience
As the owner of a cash-pay clinic, it’s likely that you deeply care about patient experience—we agree! There are a few elements in particular to think through:
Shipping speed: In today’s world, patients expect to receive their medications quickly, so be sure to understand the order fulfillment and shipping timeline. Note it’s normal for the turnaround time to be 7-10 days, so set your expectations (and your patients’ expectations) accordingly.
Customer support: A big differentiator for pharmacies is customer support (both for patients and for providers, which we’ll cover next). Be sure that patients have a way to reach the pharmacy by both email and phone call. Confirm their average response times.
Shipping requirements: Some compounding pharmacies require a signature upon delivery, which might be inconvenient for patients.
Consider placing an order for yourself or for a family member to truly evaluate the patient experience.
Provider experience
Although you may think provider experience is a lot less important than patient experience, hopefully your practice will grow quickly, and suddenly your operational and administrative overhead will become critical to your continued success. Here’s what you should explore:
ePrescribing system: It’s rare that you’ll be able to integrate directly into your EHR, and quite likely that you’ll be using a standalone solution for e-Prescribing to the compounding pharmacy. Understand what their software is and how user friendly it is. Also, understand future opportunities for integration.
Many compounding pharmacies, such as Hallandale, Empower, and South Lake rely on a system called Life-File for e-prescribing. Although this is a clunky software, if you learn how to use it once and establish your workflows, you’ll be able to easily add another pharmacy to the mix down the line.
Some compounding pharmacies have APIs (Application Programming Interfaces) that allow you to integrate into your EHR. Understand whether this is an option, whether there are certain revenue targets you have to hit before you can integrate, and preferably, have a developer review the API documentation to understand complexity and completeness.
Customer support: Similar to customer support for patients, customer support for providers is critical. Some compounding pharmacies are notorious for being impossible to get a hold of. If there’s an issue with an order, how can you reach the pharmacy? Are they available by call and email? Will you have a dedicated account representative? Your experience in getting answers to your questions during your evaluation of the compounding pharmacy is likely a strong indicator for how good (or bad) your experience will be once signed.
Pharmacist support: Many compounding pharmacies offer direct access to a pharmacist in the case of clinical questions. Be sure to ask how you can get in touch with a pharmacist and how quickly they typically respond.
Additional administrative requirements: Some pharmacies have stringent requirements for things like wet signatures, being in the same state as your patient, or seeing a patient in-person prior to prescribing a controlled substance.
Ultimately, it’s important to keep in mind that the “best” partner for a specific medication might not be the best partner for every medication. Nonetheless, we recommend starting with just one partner and layering on over time to reduce your administrative burden and have the best chance at accessing volume discounts.
Questions to ask
As we evaluate compounding pharmacies, we look for answers to at least the following questions:
Can you provide a complete catalog of your available compounded medications, along with both provider-level and patient-level pricing?
Do you offer any discounted pricing for new providers or for specific order volumes?
What are the costs for shipping and supplies (e.g., sharps containers, syringes)?
How often do you update your inventory with new formulations?
Are you licensed as a 503A or 503B facility?
In how many states are you licensed?
Do you perform full stability, sterility, and potency testing on each batch? Can you provide certificates of analysis?
What is the Beyond Use Date (BUD) for [compounded medications you anticipate using]?
How can I access the BUD on an ongoing basis?
Could you share a bit more about your approach to compliance / quality assurance?
Where do you source your ingredients, particularly for carrier oils (e.g., grapeseed oil vs. cottonseed oil)?
What is the turnaround timeline once an order is placed? What is the typical shipping speed?
Do you require a signature upon delivery? What options do you have for patients who may find this inconvenient?
How can patients reach your customer support?
What are the average response times for customer support for patients?
Which ePrescribing system do you use? Can I see a demo?
Do you integrate with any EHRs?
Do you have a public-facing API? If so, could you share the API documentation?
Do you have any revenue requirements to gain access to the API?
Do you provide any support on integrating the API?
Will I have a dedicated account representative?
How can I get in touch with your support team?
Can I access a pharmacist directly for clinical questions? How quickly do they typically respond?
Are there additional administrative requirements, such as wet signatures, same-state restrictions, or licensing considerations?
These questions should give you a great sense for what to expect and tradeoffs.
Best of luck!
Choosing a compounding pharmacy partner is a big decision, and you’re clearly doing your homework. Your future patients are lucky to have you!
As you embark on your practice building journey, we wish you success and satisfaction. If there’s anything that we can do to make the transition more seamless, please don’t hesitate to get in touch. For new clinics, we handle setting up compounding pharmacy partnerships with our preferred pricing and leveraging our diligence, and our software (available to both new and established clinics) automates many of the key workflows for compounding pharmacies.