FDA Targets Compounding Pharmacy Over Copying Approved Drugs

The U.S. Food and Drug Administration is intensifying scrutiny of large-scale drug compounding after issuing a September 18, 2026, warning letter to Empower Clinic Services, LLC, doing business as Empower Pharmacy. The agency questioned whether prescriptions for compounded versions of commercially available drugs reflected genuine, individualized clinical decisions or used patient-specific explanations to justify products that were essentially copies of approved medications.

The warning letter followed an FDA inspection in November 2025 and identified concerns involving prescriptions, production volume, documentation practices, and prescribing technology. The agency's findings could have implications for compounding pharmacies, telehealth platforms, prescriber groups, and investors whose business models depend on compounded medications.

According to an October 2026 newsletter from Mintz, the letter represents the first warning letter alleging violations of the legal prohibition on compounding drugs that are essentially copies of FDA-approved, commercially available products. The development follows late August 2026 rulings by the Fifth Circuit U.S. Court of Appeals upholding FDA actions to end the national drug shortages of injectable tirzepatide and semaglutide.

FDA identified three central concerns: some prescriptions lacked any prescriber determination of a significant difference from the commercial product; other orders contained identical language suggesting that explanations might have been generated in advance rather than written for individual patients; and the volume of compounded products raised questions about whether the stated clinical differences were genuine.

FDA connected its concerns to the use of third-party prescribing technology that offers clinicians preselected explanations for choosing compounded formulations.

"The volume of products you are producing suggests that differences between products you are compounding and the FDA-approved products are pretextual" FDA said in its September 18, 2026, warning letter.

The agency also questioned whether digital prescribing systems preserved meaningful clinician judgment when documenting why a compounded medication was appropriate for a particular patient.

"Generating prescriptions for those products through means that undermine the individualized nature of a prescriber's clinical judgment (for example through third-party technology platforms that provide prescribers with pre-selected menu options for choosing a statement of significant difference) call the individualized nature of those determinations into question, potentially undermining claims that such prescriber determinations of significant difference are sufficient to meet the conditions of section 503A" FDA said.

Under Section 503A of the Federal Food, Drug, and Cosmetic Act, qualifying compounded medications can receive exemptions from certain federal requirements. However, pharmacies must satisfy applicable conditions, including restrictions on regularly compounding or producing inordinate quantities of drugs that are essentially copies of commercially available products.

FDA's January 2018 guidance on essentially copied compounded drugs had previously identified minor changes in strength that were not known to be significant, as well as financial incentives influencing prescriptions, as examples of potential pretext. The Empower letter expands the evidence discussed in that context to include production scale, missing or repeated clinical determinations, and prescribing workflows.

A genuine, patient-specific significant difference can provide a basis for compounding a formulation that would otherwise raise essentially-copy concerns, provided the other Section 503A conditions are met. Adding another commercially available active ingredient does not automatically establish such a difference; the clinical rationale must relate to the needs of the individual patient.

The warning letter also alleged insanitary conditions, inadequate smoke studies and media fills, current good manufacturing practice deficiencies, data integrity concerns, unapproved new drug violations, and misbranding. These allegations extend beyond prescribing documentation to manufacturing controls and broader quality systems.

Mintz warned that the practices identified by FDA may occur elsewhere in digitally enabled health care businesses and could prompt broader enforcement. Pharmacies and their commercial partners may face closer examination of how clinical decisions are made, recorded, transmitted, reviewed, and connected to production volume.

The central regulatory issue is whether records across the entire prescribing process demonstrate that individualized clinical judgment genuinely drove each decision to compound a medication, rather than serving as a standardized justification for producing large quantities of products resembling approved drugs.