Traditional compounding is the preparation of a medication to meet the prescriber’s exact specifications and to be dispensed directly to the patient, pursuant to a valid prescription for that patient. Pharmaceutical compounding is performed or supervised by a pharmacist licensed by a state board of pharmacy (see question below on legal oversight of compounding versus manufacturing). Manufacturing is the mass production of drug products that have been approved by the Food and Drug Administration (FDA). These products are sold to pharmacies, health care practitioners, or others who are authorized under state and federal law to resell them.

Compounding is a central activity to the practice of pharmacy. Pharmacists are taught in pharmacy school how to properly compound medications, and many states test pharmacists’ compounding knowledge and skills before issuing them a license.