U.S. Compounding Pharmacies Market Size, Share, Growth 2025 To 2034

U.S. Compounding Pharmacies Market Size and Growth 2025 To 2034

The U.S. compounding pharmacies market size was valued at USD 5.21 billion in 2024 and is expected to be worth around USD 9.28 billion by 2034, growing at a CAGR of 6% from 2025 To 2034.

The U.S. compounding pharmacy market is expanding due to increasing demand for personalized and alternative medication solutions. As more patients seek tailored treatments for conditions like hormonal imbalances, chronic pain, and rare diseases, compounding pharmacies are filling gaps left by traditional pharmaceutical options. The growth is further fueled by an aging population requiring unique formulations, such as altered dosages or easier-to-consume medication forms, particularly for children and the elderly. Additionally, the rising prevalence of medication allergies and shortages of commercially available drugs has made compounding pharmacies a vital resource. Innovations like sterile compounding for injectable medications and the growing use of bioidentical hormones for therapies are opening new opportunities. In October 2024, the U.S. exported USD 7.69 billion worth of pharmaceutical products, which helps the compounding pharmacy market grow. This growth encourages new ideas, better research, and more people learning about customized medicines. It also leads to partnerships and improvements in compounding pharmacy services, allowing them to meet special healthcare needs both in the U.S. and worldwide.

Compounding pharmacies create customized medications tailored to meet specific patient needs. Unlike standard pharmacies, they mix or alter ingredients to create unique prescriptions, such as changing dosages, combining medications, or removing allergens. These services are helpful for patients who need a specific formulation that isn't available commercially, such as a liquid version of a pill for children or flavored medications to improve taste. Compounding is regulated by the U.S. Food and Drug Administration (FDA) and state pharmacy boards to ensure safety and quality. Common areas include hormone replacement therapy, pain management, dermatology, and veterinary medicine.

• “The practice of compounding is regulated by state boards of pharmacy. Community and hospital compounding pharmacists are allowed exemptions to the Federal Food, Drug, and Cosmetic Act of 1938 if they comply with the regulations outlined in Section 503A. All pharmacists and pharmacies engaged in compounding are subject to oversight by both federal and state authorities.”
•  “Compounded drugs are not FDA-approved which means FDA does not verify the effectiveness, safety, or quality of the compounded drugs before they are marketed. Consumers and health care professionals rely on FDA’s drug approval process for verification of safety, effectiveness and quality.”

U.S. Compounding Pharmacies Market Report Highlights

• By therapeutic area, the pain management segment has leading, accounted for 31% of the total revenue share in 2024.
• By sterility, the sterile segment was dominating in 2024 and garnered revenue share of 59%.
• By type, the 503A segment has accounted highest revenue share of 82% in 2024.
• By age group, the adult segment has dominating the market in 2024, accounted 43%.
• By compounding type, the pharmaceutical ingredient alteration (PIA) segment has held revenue share of 38% in 2024.

U.S. Compounding Pharmacies Market Growth Factors

• Increasing Demand for Personalized Medications: The compounding pharmacies can create the medicines with customized formulations, dosages, and ingredients to match the needs of the demand of the individual patients. Such medicines can be very beneficial for the patients that have allergies or sensitivities as it offers alternatives to commercial medicines. Further, these medicines can also offer medications for the disease for which the commercial treatments are not available.
• Rising Prevalence of Chronic Disease: There is a surge in the geriatric population in U.S. which increases the prevalence of the chronic diseases like diabetes, heart disease, and arthritis. For instance, according to Population Reference Bureau population of 65+ people in U.S. is expected to grow from 58 million in 2022 to 82 million by 2050. Such rise in the geriatric population will leads to rise in the number of chronic diseases which is expected to boost the growth of the U.S. compounding pharmacies market.
• Growing Awareness and Acceptance: The consumers such as patients and healthcare providers in the U.S. are getting aware about the benefits that can be offered by compounding medicines is expected to propel the growth of the market. Further it is also getting more accepted as a possible option for personalized healthcare.
• Drug Shortages and Discontinuations: There has been a shortage of drugs owing to supply chain disruptions, manufacturing issues, or regulatory changes which propels the demand for the compounding medicines. Compounding pharmacies can help in addressing the drug shortages as it can create alternative formulations. The compounding pharmacies can offer solutions for the patients who rely on the discontinued medicines.
• Regulatory Support and Streamlining: There has been an improvement in the monitoring, safety and quality of the compounded medicines since authorities like FDA and state pharmacy boards have set clear and consistent guidelines for such medications. Such regulation has helped the compounding pharmacies in gaining trust of the people which enables compounding pharmacies to operate with confidence and reduced the risk of legal challenges.

U.S. Compounding Pharmacies Market Trends

• Increased Focus on Quality and Safety: The compounding pharmacies are emphasizing on adhering to the regulations under in order to guarantee the security and effectiveness of the medicines made by them. Along with this there has been a rise in investment in the advanced quality control measures which includes testing and validation. There are stringent regulations such as Drug Quality and Security Act being formed by the concerned authorities.
• Growth in Veterinary Compounding: There has been a rise in the veterinary compounding owing to the rising pet ownership in the country which is expected to propel the growth of the market. The veterinarians are looking for the personalized treatments for the animals which have specific medical demands since there has been rising awareness about animal healthcare. The veterinarians can modify the formulations, mix medications, or can adjust the dosages with the help of compounded medications for the pet animals.
• Specialization and Niche Markets: Pharmacies are concentrating more on offering the personalized solutions for the specific patient populations and unique therapeutic areas. The compounding pharmacies are specializing more in areas like bioidentical hormone replacement therapy (BHRT), pain management, dermatology, pediatrics, and oncology instead of providing the generalized medicines. Such focus let the pharmacies to gain expertise, use innovative formulations, and offer highly personalized treatments that can match the medical requirements that can’t be fulfilled by commercial medicine.
• Advancements in Sterile Compounding: Sterile compounding includes the production of medicines in sterile conditions to prevent contamination, is important for the production of injectable medications, ophthalmic solutions, and other formulations which needs the highest level of purity. The recent technological advancements have significantly increased the accuracy, security, and the productivity of producing sterile drugs. The advancements which are done recently includes robotic systems, automated compounding equipment, and sophisticated cleanroom facilities.
• Focus on Compounding for Chronic Diseases: The focus on the compounding of chronic diseases has emerged as a significant trend in the U.S. compounding pharmacies market as there is a rising prevalence of the long-term situations such as cancer, diabetes, autoimmune disorders, and cardiovascular diseases. The patients who are suffering from the chronic illness generally requires the long-term prescription regimens that might need to be customized owing to issues such as drug intolerances, allergies, or the necessity for certain drugs that are not available in commercially produced drugs.

Report Scope

U.S. Compounding Pharmacies Market Dynamics

Drivers

Rising Demand for Bioidentical Hormone Replacement Therapy (BHRT)

• BHRT is expected to propel the growth of the U.S. compounding pharmacies market owing to the rising popularity among the people who are looking for the personalized treatment for the hormonal imbalances. The pharmacists can customize the hormone dosages, delivery method like creams, pills, and injections, and combinations with the help of compounded BHRT to meet the specific hormonal demands unlike standard hormone replacement therapies.

Rise in Chronic Diseases

• There is a rising prevalence of the diseases like diabetes, cancer, cardiovascular diseases, and autoimmune disorders which boosts the demand for the personalized medical solutions which is expected to propel the demand for the U.S. compounding pharmacies market. There is a requirement of long-term regimens for many patients that suffer from chronic illness which may not be fulfilled by commercially available drugs. Compounding pharmacies offers the personalized medications that fulfils the requirements.

Restraints

High Operational Costs

• The compounding pharmacies especially those which are involved into sterile compounding have to invest advanced equipment, cleanroom facilities, and strict safety measures to meet the regulatory requirements. The expenses of upholding good manufacturing practices (GMP), performing regular sterility testing, and keeping up with FDA regulations can be expensive, especially for smaller pharmacies which may hold back the growth of the market.

Lack of Standardized Practices

• While regulations such as Drug Quality and Security Act (DQSA) have helped in establishing the certain rules, there is still a lot of variation in how compounding pharmacies works, especially at the state level. Such inconsistency can cause in variations in drug quality, safety, and efficacy, raising concerns among the healthcare providers and patients about the dependability of the compounding pharmacies.

Opportunities

Partnership with Healthcare Providers

• The compounding pharmacies can become an important part of the personalized patient care by working with hospitals, physicians, clinics, and specialty care providers. Such partnerships allow healthcare providers to prescribe the personalized medicines which is specially created to fulfil the individual patient needs which may not be fulfilled by the commercially produced drugs. Such collaboration and partnership among the compounding pharmacies and healthcare provides is expected to propel the growth of the market during the forecast period.

Specialty Drug Compounding

• As there is a rising prevalence of complicated medical situations such as autoimmune disorders, cancer, and chronic pain it is expected that there will be rise in the demand for the personalized and specialty compounding medicines. The compounding pharmacies has an important role in making personalized formulations for the patients who might not react well to the commercially available drugs or the patients who need medicines that are not available commercially.

Challenges

Competition from Generic Pharmaceuticals

• The generic drugs are widely available, affordable, and manufactured at a large scale which makes it go-to-option for many patients and healthcare providers. It also offers standardized formulations which are approved by FDA, make it more reliable and cost-effective option in comparison to compounded pharmaceuticals. This is expected to hinder the growth of the market during the forecast period.

Limited Reimbursement

• Insurance companies generally do not reimburse the compounded pharmacies partially or fully whereas the commercially produced medicines are reimbursed either partially or fully. The patients have to bear all the expense of medication from themselves which can be higher than generic drugs. Many patients may opt for affordable and commercial medicines even though compounded medication may meet the specific needs better. 

U.S. Compounding Pharmacies Market Segmental Analysis

The U.S. compounding pharmacies market is segmented into type, therapeutic area, product, age group, compounding type, sterility, and end-user. Based on type, the market is classified into 503B, and 503A. Based on therapeutic area, the market is classified into nutritional supplements, dermatology, specialty drugs, pain management, and hormone replacement therapy. Based on product, the market is classified into oral, liquid preparations, topical, rectal, ophthalmic, nasal, and otic. Based on age group, the market is classified into geriatric, adult, and pediatric. Based on compounding type, the market is classified into pharmaceutical dosage alteration (PDA), currently unavailable pharmaceutical manufacturing (CUPM), and pharmaceutical ingredient alteration (PIA). Based on sterility, the market is classified into sterile, and non-sterile. Based on end-user, the market is classified into hospitals and clinics, specialty clinics, others.

Type Analysis

503A: The 503A segment has accounted revenue share of 82% in 2024. These compounding pharmacies are kind of traditional pharmacies which makes the personalized medicines for the patients based on the specific prescription from the authorised healthcare professional. The section 503A of the Federal Food, Drug, and Cosmetic Act permits such pharmacies to compound medicines to fulfil the specific needs of the patients like adjusting dosage, mixing medicines, or removing allergies.

503B: The 503B segment has generated revenue share of 18% in 2024. The type of pharmacies are also known as outsourcing facilities. These are specialized pharmacies which operates under the section 503B of the Federal Food, Drug and Cosmetic Act. Such pharmacies can manufacture the compounded pharmacies in bulk without any requiring individual prescriptions which allows the pharmacies to supply hospitals, clinics, and the healthcare facilities in bulk.

By Therapeutic Area

Hormone Replacement Therapy (HRT): The compounded hormone replacement therapy especially BHRT includes manufacturing personalized formulas that mimics the body’s natural hormones which helps in offering more customized approach in comparison to mass-produced options. This is especially popular among the people who suffers from issues like thyroid issues, menopause, andropause, or other hormonal imbalances. Patients generally look for the compounded HRT as it can provide exact dosages and unique form of dosages such as creams, gels, injections, or capsules which are not usually available with commercial drugs.

Pain Management: The pain management segment has held revenue share of 31% in 2024. The pain management segment is an important and expanding area of the market as compounding pharmacies offers the personalizes solutions for the patients having chronic or acute pain who might not get relief from the medicines which are commercially available. Compounded pain management enables the making of personalized drugs to match the unique requirements of the patients who are suffering from situations such as arthritis, neuropathy, fibromyalgia, or post-surgical pain.

Specialty Drugs: Specialty drugs generally includes biologics, high-cost medications, or therapies, which caters the specific medical conditions like cancer, autoimmune diseases, and genetic disorders. When the commercially available options are not suitable owing to the dosage restrictions, allergies to inactive ingredients, or other patient requirements the compounded speciality medications offers an important substitute.

Dermatology: The dermatology segment offers treatments for the wide range of skin issues such as acne, eczema, psoriasis, rosacea, and hyperpigmentation. The compounded dermatology medications let the pharmacists to create medicines that caters the specific patient needs like blending active chemicals into single cream, gel, or lotion. Patients who might not react well to the commercially available treatments or may needs alternative concentrations and delivery methods will be benefited most from such customized approach.

Nutritional Supplements: The nutritional products that are made by compounding enables the pharmacists to customize vitamins, minerals, amino acids, and other nutrition to fulfil the particular dietary needs or health objectives. Patients who have the special dietary needs, allergies, or illness that impacts the nutritional absorption will be benefitted from this.

By Age Group

Pediatric: As the age, size, and developmental needs of paediatric patients vary widely, it is important to use exact dosages, alternate delivery systems, and kid-friendly flavors to ensure compliance. The compounding pharmacies can adjust treatment regimens by blending various medications into a single a single dose, adjusting medication strengths, and creating liquid formulations for kids who have issue in swallowing tablets.

Adults: Adults may need specialized care for a variety of ailments like hormone imbalances, pain management, mental health concerns, and chronic illness such as diabetes, hypertension, and autoimmune disorder. The compounded pharmacies can improve the convenience and efficacy of treatment by modifying doses, adjust formulations to eliminate allergens, or developing the substitute delivery systems like creams, gels, or sublingual pills.

Geriatric: The compounding pharmacies offers specialized like liquid for people who have trouble swallowing pills or transdermal gels for pain management, because seniors frequently need exact dosages or alternative formulations that are not available in the normal pharmaceuticals. Furthermore, the compounded medicines can remove the unnecessary additives or allergens which might result in adverse reactions in the geriatric population.

Compounding Type Analysis

Pharmaceutical Ingredient Alteration (PIA): The PIA segment has accounted revenue share of 38% in 2024. The segment focuses on the modification or elimination of the specific ingredients in medications to better meet the needs of each patient. Patients who may be allergic, intolerant, or sensitive to any of the substances in mass-produced medications like preservatives, dyes, gluten, or lactose can be benefitted from the compounding medicines. The compounding pharmacies can make specialized formulations which enables patients in taking drug safely and without having any side-effects by adding, removing, or modifying such ingredients.

Currently Unavailable Pharmaceutical Manufacturing (CUPM): CUPM addresses the concern of drug shortages, discontinued products, or the niche medications that are not available commercially but are required by the patients. The compounding pharmacies in the CUPM are able to re-create these necessary medicines which ensures the continuity of care for the patients that depends on them for the management of the chronic diseases or particular health issues.

Pharmaceutical Dosage Alteration (PDA): The patients who needs the dosages that are non-standard which are not commercially available like the patients who needs reduce or gain dosages owing to weight, age, kidney or liver function, or sensitivity to medications.  Compounded pharmacies are able to manufacture personalized formulations which exactly match the required dosage, improving effectiveness and safety of the treatment.

Sterility Analysis

Sterile: The sterile segment has captured highest revenue share of 59% in 2024. The sterile segment is an important area which focuses on the creation of sterile medicines that are necessary for treatments including injections, eye drops, intravenous therapy, and surgical drugs which needs high standard of purity and safety. The sterile compounding involves strict process to make sure that the medicines don’t have any bacteria, pollutants, or harmful practices since the minor contamination can cause major health risks.

Non- Sterile: The non-sterile segment has held revenue share of 41% in 2024. The non-sterile segment of the compounding pharmacies focuses on the preparation of medicines which don’t need any sterile conditions such as creams, ointments, gels, capsules, and oral liquids. Such personalized medicine are used in various treatments which includes dermatological conditions, hormone replacement therapy, pain management, and pediatric care. The non-sterile compounding let the pharmacists to customize the dosage, flavor, or formulation of the medicines to meet the patient requirements. 

U.S. Compounding Pharmacies Market Top Companies

• Vertisis Custom Pharmacy
• Triangle Compounding
• Sixth Avenue Medical Pharmacy
• PenCol Pharmacy
• Fresenius Kabi USA
• Fagron
• Clinigen Limited
• ImprimisRx (Harrow Health, Inc.)
• Central Admixture Pharmacy Services, Inc.
• Avella Specialty Pharmacy

The recent new entrants in the U.S compounding pharmacies industry are changing the landscape of the industry by investing in new technologies and business models. These new companies are embracing the new technologies like advanced automation, data management and digital services to provide compounded drugs more correctly and safely and making them readily available. For example, some entrepreneurs have created automated compounding technologies which reduce preparation time for custom medications and enhance workflow for conventional pharmacists. Other companies are extending the boundaries of compounding through tele pharmacy, in which patients can speak to a pharmacist by telephone or by video and receive customized medications in the mail.

CEO statements

Scott Brunner, CEO of the Alliance for Pharmacy Compounding (APC):

"Misconceptions about the industry may make clinicians reluctant to prescribe any compounded drug, even when a patient could benefit from a custom dosage or when an essential drug is in shortage, as is the case with GLP-1 agonists. "

Recent Developments

Key players in the U.S. compounding pharmacies induistry have implemented diverse strategic initiatives to ensure continued growth, including mergers, collaborations, product development, and regional expansions. The initial phase of the COVID-19 pandemic, marked by significant disruptions, led to an increased focus on resilience and adaptability within the industry. In response, companies are now concentrating on developing innovative approaches to enhance compounding pharmacies solutions and meet evolving market demands. Some notable examples of key developments in the market include:

• In April 2024, Myonex has acquired Saveway Compounding Pharmacy to bolster its position in the market for the customized medications. The motive of the acquisition is to boost Myonex’s service offerings and market penetration.
• In May 2023, Fresenius Kabi has introduced Diazepam Injection, USP comes in 10 mg per 2ml Simplist prefilled syringes. With its ready-to-administer form, this latest addition to the Simplist range seeks to simplify the distribution of medications while lowering the possibility of errors.
• In February 2022, Fargon who deals in pharmaceutical compounding had completed the acquisition of Letco Medical which is situated in Wayne, PA, a supplier of pharmaceutical equipment and raw materials. The position of Fargon’s is improved in the market with this acquisition.

Market Segmentation

By Type

• 503B
• 503A

By Therapeutic Area

• Nutritional Supplements
• Dermatology
• Specialty Drugs
• Pain Management
• Hormone Replacement Therapy

By Product

• Oral
  
  • Tablets
  • Powder
  • Capsules
  • Granules
  • Others
• Liquid Preparations
  
  • Syrup
  • Emulsion
  • Solutions
  • Suspension
  • Others
• Topical
  
  • Gels
  • Creams
  • Ointments
  • Pastes
  • Others
• Rectal
  
  • Suppositories
  • Enema
  • Others
• Ophthalmic
• Nasal
• Otic

By Age Group

• Geriatric
• Adult
• Pediatric

By Compounding Type

• Pharmaceutical Dosage Alteration (PDA)
• Currently Unavailable Pharmaceutical Manufacturing (CUPM)
• Pharmaceutical Ingredient Alteration (PIA)

By Sterility

• Sterile
• Non-Sterile

By End-User

• Hospitals and Clinics
• Specialty Clinics
• Others