Sterile Compounding Services


ASHP Guidelines on Outsourcing Sterile Compounding Services


Health care organizations considering outsourcing sterile compounding services should have a clear understanding of what they want to accomplish. Consideration should include, at the least, an internal needs assessment, a cost analysis, and a careful review of prospective compounding pharmacies. The organization should examine the potential long-term consequences of outsourcing as well as the short-term outcomes expected during a contract’s performance period.

The purpose of these guidelines is to provide an overview of factors and processes for health care organizations to consider when exploring outsourcing of pharmacy sterile compounding. The ideas presented in this document could be used for strategic planning with the organization’s decision-makers, for drafting contract provisions, for comparing prospective compounding pharmacies, for preparing for contract negotiations, or for evaluating a compounding pharmacy’s performance.

This document includes ideas about reasons for outsourcing and reasons for not outsourcing, services available from compounding pharmacies, the outsourcing process and outsourcing arrangements, and evaluation of a compounding pharmacy’s performance. The appendix provides a topical list of contract provisions, some of which relate to practices that are the subject of other American Society of Health-System Pharmacy (ASHP) guidelines. Organizations should refer to pertinent ASHP guidelines for additional information on which to base their contract provisions, agreements, and decisions.1–3 This document addresses representative outsourcing options and contract agreements and is not intended to cover all situations. Managers of pharmacy and health care organizations should use their professional judgment about applicability to their own needs and circumstances.


There are various environmental influences and market forces that may contribute to a facility’s decision to consider outsourcing. A list of some of those considerations follows.

Organizational and Operational

  • Limited available technological resources to provide the specific desired services.
  • Re-engineering and downsizing initiatives.
  • Consolidation and integration of health systems and departments within health systems.
  • Elimination of or reduction in the size of traditional pharmacy departments.
  • Reorganization around patient-focused care.
  • Implementation of automated pharmacy systems and the attendant need to reorganize medication preparation and distribution functions.


  • Shortage of pharmacists, nurses, and other health care professionals.
  • Shortage of pharmacy personnel with specific experience and capabilities.

Financial and Cost Control

  • Restricted budgets.
  • Increased operating costs.
  • Increased drug costs.
  • Increased emphasis on measuring performance in terms of staffing and costs.

Quality Assurance

  • Increased expectations of and pressures from payers, accreditation organizations, and consumer groups to improve the quality of patient care, reduce the incidence of hospital infections, and demonstrate compliance with applicable standards and regulations.

Governmental and Regulatory

  • Reductions of federal, state, and local government reimbursement for health care.
  • Increased numbers of individuals dependent on federal, state, and local governments for health care.
  • Increased federal and state interest in standards for sterile compounding (i.e., United States Pharmacopeia [USP] chapter 7974).


  • Increased competition among healthcare organizations.
  • Increased competition among suppliers of pharmaceutical products and related services.

Purposes of Outsourcing

Health care organizations that conduct in-depth assessments may decide that outsourcing either is or is not a good option for meeting their needs. Reasons for their decision will vary according to a variety of factors.

Reasons Health Care Organizations Outsource Sterile Compounding Services. Organizations tend to outsource sterile compounding services when guided by a careful assessment of their capabilities of providing services themselves, when unsuccessful in using their own resources to provide those services, or, in some cases, upon advice from a consultant. Contracting with an outsourcing firm may produce one or more of the following results.

Organizational and Operational

  • Ease the consolidation of pharmaceutical services in integrated health systems.
  • Resolve operational inefficiencies (e.g., batch compounding, staff scheduling, high-demand periods).
  • Provide compounded preparations outside the scope of preparations routinely provided (e.g., complex or rarely compounded preparations).
  • Enable the organization to acquire additional resources and expertise to carry out other priorities (e.g., reallocation of existing staff to roles in patient care areas).


  • Help the organization to staff hard-to-fill pharmacy positions and address staffing vacancies.
  • Allow the organization to reach optimal staffing levels for achieving productivity targets.

Financial and Cost Control

  • Control or reduce the cost of the organization’s services (e.g., by shifting costs associated with i.v. admixture production from fixed to variable).
  • Control or reduce labor costs (e.g., by shifting responsibility for employees, benefits, and liabilities to a compounding pharmacy).
  • Enable the organization to acquire a business partner to share the risks and other associated liability by defining the responsibilities associated with operating sterile compounding services.
  • Minimize the cost of facility remodeling (e.g., to meet USP 797 requirements).

Quality Assurance

  • Provide consistent pharmacy and sterile compounding services, including documented beyond-use dating.
  • Enable the organization to maintain or improve the quality of patient care (e.g., by expanding clinical services or establishing new services).
  • Provide support for the medical and nursing staffs and improve physician–nursing–pharmacy collaboration.
  • Improve organizational procedures by learning from the compounding pharmacy’s experience and knowledge, especially with new technologies (e.g., labeling, bar-coding, or tamper-evidence technologies).

Governmental and Regulatory

  • Assist and ensure compliance with legal, regulatory, certification, and accreditation requirements.


  • Allow the organization to gain an edge on competitors through improvements in service, quality, or price.

Reasons Health Care Organizations Do Not Outsource Sterile Compounding Services. An organization’s choice to continue providing its own sterile compounding services may be based on one or more of the following reasons.

Organizational and Operational

  • The organization demonstrates that its sterile compounding services are cost-effective, well managed, and provided as efficiently as or better than they could be by a compounding pharmacy.
  • Negative experiences with outsourcing pharmacy (or even nonpharmacy) services, or awareness of other organizations’ negative experiences with such outsourcing.
  • Concern about time delays in receiving compounded preparations, especially products that are needed urgently or have poor stability or short beyond-use times.
  • Concern that the compounding pharmacy may experience interruptions in service, perhaps with little notice, due to quality-control issues not related to services provided to the organization.
  • Concern that the decision to outsource sterile compounding services can be reversed only with great difficulty.
  • Concern about losing short-term and long-term control over decisions regarding or expertise in sterile compounding services.


  • Concern that staff will be reduced to unacceptable levels.

Financial and Cost Control

  • An assessment that outsourcing would increase rather than decrease costs.
  • Concern that high-cost drugs might be excluded from contract agreements.
  • Concern that the organization may not be able to recapitalize sterile compounding services if outsourcing is unsuccessful.

Quality Assurance

  • Concern that conflicting values and priorities of the compounding pharmacy and the organization will reduce quality.
  • Concern about the qualifications or competencies of compounding pharmacy staff.

Professional Responsibility

  • Concern that outsourcing sterile compounding will confuse or dilute the onsite pharmacists’ ultimate professional and legal authority and responsibility for other medication-related activities and outcomes at the site.

Services Provided by Compounding Pharmacies

The needs of the health care organization should guide the identification of potential compounding pharmacies with the appropriate expertise and capabilities. Among the services that may be available from compounding pharmacies are the preparation of implantable and external pump cartridges; total parenteral nutrition, dialysis, irrigation, or cardioplegia solutions; antibiotics; ophthalmic injectables and solutions; chemotherapy preparations; and analgesic preparations (patient-controlled analgesia, epidural, or regional nerve-block devices).

Compounding pharmacies are regulated in a number of ways. They may be registered as pharmacies and/or wholesalers in the states in which they dispense, as drug establishments and/or device manufacturers by the Food and Drug Administration (FDA), and/or as manufacturers by the Drug Enforcement Administration (DEA). FDA requires a device manufacturer registration for a compounding pharmacy to dispense devices such as dialysate solutions or heparin or citrate syringes. A compounding pharmacy registered as a drug establishment may apply for a labeler code that allows it to create National Drug Code (NDC) numbers for its products. These NDC numbers do not indicate FDA approval or that a New Drug Application has been filed, nor do they indicate a higher degree of quality (e.g., that terminal sterilization rather than an aseptic fill process has been used in compounding the preparation). Ascertaining that a preparation is labeled with an NDC number is therefore not a substitute for the due diligence required to verify a compounding pharmacy’s quality processes (e.g., USP 797, current good manufacturing processes). Finally, compounding pharmacies are not permitted to prepare copies of commercial products. Dispensing of such products by compounding pharmacies will result in regulatory action, as FDA enforcement discretion does not apply to copies of commercial products.

Outsourcing Process

After the health care organization has completed an internal assessment of its needs and capabilities and decided to explore outsourcing, it should identify and contact reputable compounding pharmacies. Organizations that are part of a larger network (e.g., an integrated delivery network) may explore options that are available to them through the network or from other organizations in the network.

Some organizations simply identify prospective compounding pharmacies and ask them to submit a proposal. A more thorough approach is to require prospective compounding pharmacies to respond to a request for proposal (RFP). Although a formal RFP (and the compounding pharmacy’s formal proposal based on the RFP) may not be necessary, the information found in typical RFPs and proposals may be helpful for making a decision about outsourcing.

Contents of RFPs. RFPs often include the following information:

  • A description of the demographics of the organization making the RFP (e.g., number of hospitals, bed sizes, typical census).
  • A description of the process the organization will use to select the compounding pharmacy.
  • The organization’s standard terms and conditions for contracting for services or, if available, a sample contract from the organization.
  • The names and telephone numbers of individuals in the organization who are involved in the outsourcing decision (the organization’s director of pharmacy should be included).
  • A description of the specific services required of the compounding pharmacy (e.g., volume, intravenous admixture preparation, automated pharmacy systems, existing intravenous delivery systems and devices) and performance-measurement criteria or targets.
  • The dates on which the organization’s representatives can inspect the compounding pharmacy’s facility, with reasonable notice.
  • The number of copies of the proposal to submit.
  • The name and address of the individual to whom the proposal is to be delivered.
  • Acceptable methods for delivery of the proposal (e.g., e-mail, mail, delivery service, courier).
  • A statement that the organization reserves the right to cancel its solicitation for services and reject any and all proposals.
  • A deadline date and time for receipt of the proposal.
  • The date on which the compounding pharmacy would be expected to initiate services.
  • The date by which the selected compounding pharmacy must provide a written contract.
  • Other requirements related to the proposal (e.g., that it be in a specific file format, include reference to an RFP number [if any], or be signed by an officer of the firm who is authorized to contract or his or her designee).

Contents of Proposals. RFPs should require prospective compounding pharmacies to submit the following information with their proposals:

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Aug 27, 2016 | Posted by in GENERAL & FAMILY MEDICINE | Comments Off on Sterile Compounding Services

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