On June 17, 2025, the California State Board of Pharmacy adopted significant updates to its compounding regulations, including a revised definition of “essentially a copy” of a commercially available drug product. These changes, now codified at 16 CCR §§ 1735.1, 1736.1, 1735.8, and 1736.8, have major implications for 503A compounding pharmacies, particularly those compounding medications containing GLP-1 products, such as semaglutide or tirzepatide.
Defining “Essentially a Copy”
Under the new rules, a compounded drug is considered “essentially a copy” if it contains the same active pharmaceutical ingredient(s) (APIs) as a commercially available product, unless:
- For an identified individual patient, a change is made that produces a clinically significant difference, and
- The pharmacist verifies and documents that difference in a readily retrievable format.
This standard applies to both sterile and nonsterile compounding, with slight differences in the exceptions available.
Shortage-Based Exceptions
Pharmacies may compound a product that would otherwise be “essentially a copy” if:
- The product is listed on the ASHP or FDA drug shortage lists (with different timing requirements for sterile vs. nonsterile compounding), or
- The product is unobtainable for a licensed hospital or health facility (with documented evidence of procurement attempts).
For nonsterile compounding, the shortage can exist at the time of compounding or within 60 days after the shortage ends. For sterile compounding, the shortage must exist both at the time of compounding and dispensing.
Deviations From FDA Standards
What is especially noteworthy with California’s new regulations is that it deviates from (and goes beyond) the federal standards contained in Section 503A of the Food, Drug and Cosmetics Act. Section 503A does not explicitly define what constitutes “essentially a copy of a commercially available drug,” but indicates that it does not include a drug product in which there is a change, made for an identified individual patient, which produces for that patient a “significant difference,” as determined by the prescribing practitioner, between the compounded drug and the comparable commercially available drug product. Guidance put forth by the FDA has indicated that the FDA intends to consider a compounded drug product to be essentially a copy of a commercially available drug product if: (1) the compounded drug product has the same APIs as the commercially available drug product; (2) the APIs have the same, similar, or an easily substitutable dosage strength; and (3) the commercially available drug product can be used by the same route of administration as prescribed for the compounded drug. California’s regulations do not have any of these caveats or exceptions. If a compounded drug has the same API as a commercially available drug, it would be considered “essentially a copy” irrespective of any change to the strengths, routes of administration, etc.
In addition, when determining whether a change made to a drug product by a prescriber is sufficient to pull the product out of the “essentially a copy” designation, the California regulations require that the change produces a “clinically significant difference” as opposed to a “significant difference,” which is required by the federal law. As explained below, the interpretation of this difference could have a significant impact on the ability of pharmacies to compound products in California.
“Clinically Significant Difference” – Who Decides?
While prescribers can, and should, state the medical rationale for a formulation change, the regulations place the burden squarely on the pharmacist to verify and document that the change produces a “clinically significant difference” for the identified patient. Ultimately, the Board of Pharmacy has the final authority to determine whether the documented rationale meets the regulatory standard.
This means that even if the prescriber and pharmacist agree on the need for a compounded GLP-1 formulation, the Board could find the documentation insufficient and take enforcement action. With a lack of clear precedent, it remains unclear how the Board will interpret clinical rationales to support changes being made.
What Counts as Acceptable Evidence
In the event of an inspection or enforcement action, the Board will expect patient-specific, detailed, and clinically grounded documentation. Elements that may strengthen a pharmacy’s records in this regard could include:
- Prescriber’s statements specifying the change (e.g., excipient removal, alternative concentration, liquid dosage form) and the expected clinical impact for that patient.
- Pharmacist verification explaining why the change is clinically significant and how it differs from the commercial product.
- Supporting patient data, such as allergy documentation, history of adverse reactions, difficulty swallowing, or lab results justifying dose/form changes.
- Comparative product data showing the absence of the needed strength, formulation, or excipient profile in FDA-approved products.
- Communication records between prescriber, pharmacist, and patient confirming the clinical need.
Vague reasons like “patient prefers capsules” are unlikely to meet the Board’s standard. Equally so, because the regulations require that the clinically significant difference be tied to an individually identified patient, relying on blanket “one-size-fits-all” justifications will likely not survive scrutiny.
Implications for GLP-1 Compounding
For GLP-1 products, which have commercially available versions, California-licensed pharmacies must be especially vigilant. First, a compounded semaglutide or tirzepatide product – even with changes to the dosage strengths or concentrations – risks being deemed “essentially a copy” unless it is also accompanied by a documented, patient-specific clinical justification. Likewise, merely adding vitamins or amino acids (e.g., B12, L-carnitine) are unlikely, on their own, to be considered a clinically significant difference unless tied to a documented patient condition.
The Board of Pharmacy has already begun to scrutinize compounded GLP-1 prescriptions during inspections of pharmacies, and it is foreseeable that it could aggressively pursue disciplinary proceedings given heightened public and regulatory attention on these products.
Takeaways for California Compounders
It is important for pharmacies licensed in California and dispensing compounded products to California patients to take additional steps to ensure compliance with these new requirements. This includes training staff and implementing new record retention policies. It also includes reevaluating the documentation being used to capture prescriber rationale and pharmacist verification for each prescription. Failure to meet California’s new documentation standards, even if you comply with FDA’s 503A requirements, could result in citations, accusations, or disciplinary action.
Frier Levitt attorneys regularly counsel 503A compounding pharmacies on a variety of issues, including compliance with state and federal rules and regulations. If you have questions regarding pharmacy compounding compliance, including with respect to GLP-1 products, contact Frier Levitt for assistance.
