U.S. Compounding Pharmacies Market - By Pharmacy Type, By Sterility, By Product, By Compounding Type, By Application, By Therapeutic Area - Forecast, 2025 - 2034

U.S. Compounding Pharmacies Market Size

The U.S. compounding pharmacies market size was valued at USD 6 billion in 2024. The market is estimated to grow from USD 6.3 billion in 2025 to USD 10.8 billion in 2034, growing at a CAGR of 6.2% from 2025 to 2034. The U.S. compounding pharmacies industry is driven by the growing popularity of personalized medication across the country.
 

Personalized medicine, often known as precision medicine, considers differences in lifestyle and genetic variation. It has the potential to improve patient health outcomes, particularly for pediatric patients and elderly, who may be allergic to specific components in commercial medicine. Similarly, the rising rate of drug failure and the drug shortages in the country will also drive the demand for compounding pharmacies. Such scenarios will positively influence industry expansion.
 

As of 2019, the American Pharmacists Association reported that there are approximately 7,500 compounding pharmacies in the U.S., representing a specialized sector within the broader pharmaceutical industry. These pharmacies cater to a wide range of therapeutic areas, including pain management, pediatrics, oncology, dermatology, hormone replacement, and other therapeutic areas. Compounding pharmacies not only address specific patient needs but also play a critical role in reducing the impact of drug shortages. This expanding demand for individualized medication solutions is reflected in the fact that compounded drugs account for 1 to 3% of all prescriptions in the U.S., according to the Alliance for Pharmacy Compounding.
 

Additionally, the 2019 Letco Medical survey revealed that nearly 40% of pharmacists worked in pharmacies exclusively dedicated to compounding. These pharmacies cater to a wide range of therapeutic areas, ranging from men's and women's health to veterinary care and oncology, reflecting their broad relevance in today's healthcare ecosystem.
 

Moreover, the increasing recognition of compounding pharmacies, driven by their ability to create products that are not commercially available or customizable, is shifting them from the background to the forefront of healthcare services. Additionally, the increasing prevalence of chronic diseases such as diabetes, cancer, and endocrine system disorders is expanding the market as they demand long-term adherence to treatment protocols with precise dosages, making compounded medications a suitable solution.
 

For example, hormone replacement therapy (HRT) has driven significant demand in the bioidentical hormone compounding segment. Increased understanding about personalized medicine by both physicians and patients is pushing more people towards compounding pharmacies for targeted treatments.
 

The fundamental role of compounding pharmacies is to prepare drugs prescribed by doctors for individual patients with their specific needs that are either not readily available or not manufactured by commercial pharmaceutical companies. Such medications are manufactured in compounding facilities by a licensed pharmacist after considering the patient's health needs.
 

U.S. Compounding Pharmacies Market Trends

• Compounding pharmacies market growth is fueled by a surging geriatric population base along with improved longevity.
   
• For instance, according to the Population Reference Bureau, the number of Americans aged 65 and older is expected to nearly double from 52 million in 2018 to 95 million by 2060, with the 65-and-over age group accounting for 23% of the total population. Therefore, compound medications will undoubtedly be in demand in the future, as older people are highly prone to various chronic illnesses.
   
• Similarly, the rising prevalence of chronic pain among the elderly further increases the demand for compounded medications to manage pain in this group, thereby boosting market growth.
   
• In addition, the rising shortages of different drugs, including emergency drugs and cancer medicines, will increase the demand from compounding pharmacies over the forecast timeframe.
   
• Most of the shortages can be attributed to quality and manufacturing issues. Production delay caused at the manufacturer's end, delay in receiving raw materials and components from suppliers and discontinuation of previously manufactured drugs further led to drug shortage. Additionally, the limited capacity of raw material suppliers, coupled with long lead times and the complexity of the manufacturing process, increases the drug shortages.
   
• For instance, as per the American Society of Health-System Pharmacists (ASHP), in 2024, the U.S. experienced an all-time high of drug shortages, with 323 active shortages recorded in the first quarter. While this number has slightly decreased to 270 as of April 2025, more than 40% of current shortages began in 2022 or earlier. These shortages are impacting essential medicines, especially injectables and generic drugs. Such drug shortages increase the adoption of compounding pharmacies, thereby driving the market growth.
   
• Furthermore, the convenience and benefits offered by compounded drugs will serve to be a high impact driving factor. The capability of different compounding pharmacies to create specific dosages that are not produced commercially, different allergy-free versions of drugs for individuals' allergies and liquid doses for patients with difficulty swallowing pills will boost demand for compounded drugs. Also, compounding pharmacies can combine certain prescriptions into a single dose, allowing patients to take one pill instead of many. These factors enhance the inclination of patients towards compounded medications, thus fostering market growth.
   
• Lastly, lower costs of compounded drugs due to access of pharmacists to pure, high-quality chemicals, which often cost less, will further propel the business demand. Additionally, the removal of dyes and preservatives in compounding further lowers costs. All these factors will together contribute to high demand for compounded medications over the forecast years.
   

U.S. Compounding Pharmacies Market Analysis

The U.S. market was valued at USD 5.2 billion in 2021. The following year, it saw a slight increase to USD 5.4 billion, and by 2023, the market further climbed to USD 5.7 billion.
 

Based on the pharmacy type, the U.S. market is segmented into 503A and 503B. The 503A segment dominated the market in 2024 and was valued at USD 4.4 billion.
 

• The 503A compounding pharmacies in the U.S. primarily fulfill patient-specific prescriptions. These pharmacies function under Section 503A of the Federal Food, Drug, and Cosmetic Act, which permits designated pharmacists and medical practitioners to compound and prepare medications specified on an individual basis.
   
• Their ability to create tailored medications, including formulations of allergen-free drugs or dosages designed for pediatric and geriatric patients, directly fulfills individual patient demands. This flexibility gives 503A pharmacies a broad and stable consumer base, especially in hospital, outpatient, and long-term care settings.
   
• Also, the flexible rules governing 503A pharmacies offer some convenience relative to 503B outsourcing facilities. While all 503B facilities are subject to Current Good Manufacturing Practice (cGMP) requirements and FDA-issued facility inspections, 503A pharmacies are mainly regulated by state boards of pharmacy. This reduces regulatory burden and cost, especially for small and medium-sized compounding pharmacies. As a result, more compounding pharmacies prefer to stay in the 503A category, thereby further increasing the dominance of this market segment.
   

Based on the sterility, the U.S. compounding pharmacies market is segmented into sterile and non-sterile. The non-sterile segment dominated the market in 2024 and is anticipated to grow at a CAGR of 6.1% between 2025 - 2034.

• The non-sterile dosage form involves medicines that are to be taken orally such as pills and liquids, or topical application forms such as creams, ointments, etc. that are rubbed onto the skin.
   
• The rising demand for such dosage forms will boost the compounding pharmacies market and propel segmental growth.
   
• Additionally, non-sterile formulations are subject to less strict regulatory requirements, making them more accessible for 503A pharmacies operating under state pharmacy boards.
   
• As the incidence of chronic conditions, geriatric care needs, and lifestyle-related conditions continues to rise, the non-sterile segment is well-positioned to sustain its leading role in the U.S. compounding pharmacy landscape.
   

Based on the product, the U.S. compounding pharmacies market is segmented into oral, parenteral, topical, ophthalmic, nasal, rectal, and otic. The oral segment is further categorized into solid preparations and liquid preparations. The oral segment dominated the market in 2024 with a market share of 33.1%.
 

• Increasing demand for oral compounded medications can be attributed to the several benefits associated with the oral dosage form, such as self-administration, convenience, and being pain-free.
   
• The availability of several medications in oral form, such as solid preparations that include capsules, tablets, powder, etc. and liquid preparations such as syrups, suspensions, etc., as compared to other dosage forms, fuels the segmental growth.
   
• Moreover, higher preference towards oral compounded medications, especially in children and the geriatric population, further drives the oral segment market growth.
   

Based on the compounding type, the U.S. compounding pharmacies market is segmented into Pharmaceutical Ingredient Alteration (PIA), Currently Unavailable Pharmaceutical Manufacturing (CUPM), Pharmaceutical Dosage Alteration (PDA), and other compounding types. The Pharmaceutical Ingredient Alteration (PIA) segment dominated the market in 2024 and is anticipated to reach USD 4.1 billion by 2034.
 

• The Pharmaceutical Ingredient Alteration (PIA) segment holds a significant market share in the U.S. market due to its critical role in personalizing medications to meet individual patient needs.
   
• The ability of compounding pharmacies to alter ingredients to include or omit certain drugs is gaining popularity. Pharmaceutical Ingredient Alteration (PIA) allows addition or deletion of specific drugs in a medication to formulate patient specific medicines as per the patient need.
   
• This is highly beneficial in substituting certain drugs that the patient might be allergic to, allowing pharmacists to create allergy-free versions of commercial drugs.
   
• Such benefits of compounded medications enhance the compounded pharmacies industry growth.
   

Based on the application, the U.S. compounding pharmacies market is segmented into adult, geriatric, veterinary, and pediatric. The adult segment dominated the market in 2024 and is anticipated to grow at a CAGR of 5.7% between 2025 - 2034.
 

• The high market share of the adult segment is primarily driven by the growing prevalence of chronic diseases, which require personalized medication solutions.
   
• Adults, particularly those with complex health conditions, often require tailored pharmaceutical preparations that are not readily available in standard formulations.
   
• Additionally, rising awareness about the benefits of compounded medications, including the ability to create formulations free from allergens, dyes, and preservatives, further drives the market.
   

Based on the therapeutic area, the U.S. compounding pharmacies market is segmented into pain management, hormone replacement, dermatology, specialty drugs, nutritional supplements, and other therapeutic areas. The pain management segment held a market share of 31% in 2024.
 

• Compounding pharmacies play a crucial role in creating tailored pain relief formulations, offering solutions that address specific patient needs, such as customized dosage forms, unique combinations of pain relievers, and alternative delivery methods.
   
• Additionally, the growing incidence of chronic pain among adults and rising geriatric population across the globe with increased susceptibility to chronic pain increases the demand for pain medications.
   
• For instance, according to the CDC 2019 report, 20.4% of the U.S. adults had chronic pain. Such scenarios are expected to provide a massive opportunity for the pain management market segment.
   

The South Atlantic zone dominated the U.S. compounding pharmacies market with a market share of 22.8% in 2024.
 

The Florida compounding pharmacies market was valued at USD 384.4 million and USD 397.8 million in 2021 and 2022, respectively. The market size reached USD 428.7 million in 2024, growing from USD 412.8 million in 2023.
 

• Florida holds a prominent position in the U.S. market because of its vast network of healthcare facilities and the aging population.
   
• There is an increasing elderly demographic in the state, which increases the demand for medications tailored to the patients, specifically for chronic and age-related illnesses.
   
• Additionally, the state has a high number of licensed compounding pharmacies alongside robust state-level regulatory oversight, which supports safety, quality, innovation, and compliance, further supporting market growth.
   

Georgia compounding pharmacies market is anticipated to witness considerable growth over the analysis period.
 

• The Georgia compounding pharmacies market is growing rapidly owing to its advanced infrastructure, increasing demand for personalized medication, and rising investment in pharmaceutical services.
   
• The state stands out for the high number of chronic health conditions, such as diabetes, arthritis, and hormonal changes, which require custom-compounded medications.
   
• Furthermore, Georgia's geriatric population drives the need for alternative dosage forms like topical gels and transdermal patches, increasing the need for compounding medication solutions.
   
• The growth of prominent medical facilities located in North Georgia, along with the state's supportive policies on pharmacy regulations, promotes the development of compounding services in Georgia.
   

Pacific Central zone of the U.S. was valued at USD 1 billion in 2024 and is anticipated to witness significant growth over the analysis period.
 

• The Pacific Central region has a considerable share of the U.S. compounding pharmacies market because of its advanced healthcare infrastructure and an urbanized population. States in this region, such as California, have high concentrations of hospitals, clinics, and specialty practices that use customized medicines tailored to patients’ needs.
   
• Also, increasing focus on bio-identical hormone replacement therapies, cosmeceuticals, and pain medications has bolstered regional growth.
   
• Along with strong demand for healthcare services, the Pacific Central area has well-defined regulatory policies and state boards for compounding pharmacies, which make operations safer and more uniform, thus enhancing provider and patient confidence in compounded medications.
   

U.S. Compounding Pharmacies Market Share

The competitive landscape in the compounding pharmacies market is characterized by a mix of large-scale, well-established players and smaller, independent pharmacies. The key industry players are consistently involved in creating new opportunities in the healthcare sector. The top 4 players such as B. Braun, Fagron, Fresenius Kabi, and Baxter dominate the market with approximately 35% - 40% of the market owing to their extensive product offerings, advanced compounding technologies, and strong distribution networks. The industry participants are utilizing a combination of organic and inorganic growth strategies in a bid to capture the highest market share and outperform the competition. Major strategies include new product launches, partnerships, and expansion among others.
 

U.S. Compounding Pharmacies Market Companies

Major players operating in the U.S. compounding pharmacies industry are:

• Baxter International
• B. Braun
• Dougherty's Pharmacy
• Fagron
• Fresenius Kabi
• Harrow
• Institutional Pharmacy Solutions
• ITC Compounding Pharmacy
• McGuff Outsourcing Solutions
• Nephron Pharmaceuticals
• Pavilion Compounding Pharmacy
• Pencol Compounding Pharmacy
• QuVa Pharma
• Rx3 Compounding Pharmacy
• Triangle Compounding Pharmacies
• Village Compounding Pharmacy
• Wedgewood Pharmacy
   

B. Braun is a significant player in the U.S. market, particularly in sterile compounding services. Through its U.S. subsidiary, B. Braun Medical Inc., the company offers a range of compounded sterile preparations, including intravenous solutions and injectable drugs, catering to hospitals and healthcare facilities nationwide. B. Braun's commitment to quality and innovation has strengthened its position among the top compounding pharmacy providers in the U.S.
 

Fagron is a prominent 503B outsourcing facility in the U.S. compounding pharmacy market, delivering cGMP-compliant sterile medications to over 7,400 healthcare providers nationwide. With state-of-the-art facilities in Wichita, Kansas, and Boston, Massachusetts, the company offers a diverse portfolio that includes critical care, ophthalmics, pain management, and specialty presentations. Strategic expansions, such as the acquisition of a Boston facility from Fresenius Kabi, have increased Fagron's capacity and geographic reach in the U.S. market.
 

U.S. Compounding Pharmacies Industry News

• In April 2025, B. Braun Medical Inc., a subsidiary of B. Braun announced FDA approval for Piperacillin and Tazobactam for Injection and Sodium Chloride Injection in the DUPLEX Drug Delivery System. This advancement strengthens B. Braun's position in the U.S. market for personalized IV antibiotics.
   
• In December 2024, Baxter expanded its U.S. Pharmaceuticals portfolio with five new injectable products, including Micafungin, Cyclophosphamide, Pantoprazole Sodium, Cefazolin, and Levetiracetam. These additions aim to support personalized patient care and enhance offerings within the U.S. market.
   
• In June 2023, Dougherty Pharmacy expanded its footprint with the opening of a third location in Canastota. This move underscores the growing demand for personalized medications, reinforcing Dougherty's role in the expanding U.S. market.
   
• In May 2023, Fresenius Kabi launched Diazepam Injection, USP (10 mg/2 mL) in ready-to-administer Simplist prefilled syringes in the U.S., supporting the compounding pharmacies market by enhancing efficiency and reducing medication preparation errors.
   
• In February 2023, Harrow introduced next-generation compounded Atropine formulations through its ImprimisRx subsidiary. These customizable, patent-pending eye drops aim to support pediatric myopia management, reinforcing Harrow's leadership in the U.S. market for ophthalmic treatments.
   

The U.S. compounding pharmacies market research report includes in-depth coverage of the industry with estimates and forecast in terms of revenue in USD Million from 2021 – 2034 for the following segments:

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Market, By Pharmacy Type

• 503A
• 503B

Market, By Sterility

• Sterile
• Non-sterile

Market, By Product

• Oral
  • Solid preparations
    • Tablets
    • Capsules
    • Granules
    • Powder
    • Other solid preparations
  • Liquid preparations
    • Syrup
    • Suspension
    • Emulsion
    • Solutions
    • Other liquid preparations
• Parenteral
  • Large volume parenterals (LVPs)
  • Small volume parenterals (LVPs)
• Topical
  • Ointments
  • Gels
  • Creams
  • Pastes
  • Other topical products
• Ophthalmic
• Nasal
• Rectal
  • Suppositories
  • Enema
  • Other rectal products
• Otic

Market, By Compounding Type

• Pharmaceutical ingredient alteration (PIA)
• Currently unavailable pharmaceutical manufacturing (CUPM)
• Pharmaceutical dosage alteration (PDA)
• Other compounding types

Market, By Application

• Adult
• Geriatric
• Veterinary
• Pediatric

Market, By Therapeutic Area

• Pain management
• Hormone replacement
• Dermatology
• Specialty drugs
• Nutritional supplements
• Other therapeutic areas

The above information is provided for the following zones and states:

• Northeast
  • Connecticut
  • Maine
  • Massachusetts
  • New Hampshire
  • Rhode Island
  • Vermont
  • New Jersey
  • New York
  • Pennsylvania
• East North Central
  • Wisconsin
  • Michigan
  • Illinois
  • Indiana
  • Ohio
•  West North Central
  • North Dakota
  • South Dakota
  • Nebraska
  • Kansas
  • Minnesota
  • Iowa
  • Missouri
• South Atlantic  
  • Delaware
  • Maryland
  • District of Columbia
  • Virginia
  • West Virginia
  • North Carolina
  • South Carolina
  • Georgia
  • Florida
• East South Central          
  • Kentucky
  • Tennessee
  • Mississippi
  • Alabama
• West South Central        
  • Oklahoma
  • Texas
  • Arkansas
  • Louisiana
• Mountain States             
  • Idaho
  • Montana
  • Wyoming
  • Nevada
  • Utah
  • Colorado
  • Arizona
  • New Mexico
• Pacific Central  
  • California
  • Alaska
  • Hawaii
  • Oregon
  • Washington