In Canada, manufacturing and compounding are distinct pharmaceutical activities, primarily differentiated by regulatory oversight, scale of production, and intent.

As mentioned in the previous chapter, another factor in the decision of whether or not to compound a prescription is the determination of whether the activity could be considered manufacturing, because pharmacy personnel are not permitted to manufacture.

Health Canada’s Policy on Manufacturing and Compounding Drug Products in Canada (POL-0051) provides clear distinctions between compounding and manufacturing activities.  Please review the policy at the link provided for more information.

Policy on Manufacturing and Compounding Drug Products in Canada (POL-0051)

In order for the activity to be considered compounding, there must be:

• A demonstrated person-healthcare professional relationship
• The activity needs to be regulated and the facility be up to provincial standards
• There must not be a commercially available identical product
• There must not be a large quantity made on a regular basis, especially when there is no prescription for the product

Manufacturing

• Regulated by: Health Canada under the Food and Drugs Act and Good Manufacturing Practices (GMP) requirements.
• Definition: Large-scale production of commercially available pharmaceuticals intended for mass distribution.
• Purpose: Produces standardized, pre-approved medications for broad public use.
• Oversight: Requires a Drug Establishment License (DEL), strict quality control measures, batch testing, and adherence to federal regulations.
• Advertising: Manufactured products are often promoted directly to consumers and healthcare professionals
• Example: Pharmaceutical companies producing over-the-counter or prescription drugs for retail sale.

Compounding

• Regulated by: Provincial pharmacy regulatory authorities following NAPRA’s Model Standards for Pharmacy Compounding.
• Definition: The preparation of customized medications for individual patient needs, typically in a pharmacy setting.
• Purpose: Tailors medications when commercially available products do not meet a patient’s needs (e.g., altering dosage forms, removing allergens, or creating discontinued medications).
• Oversight: No Drug Establishment License (DEL) required, but must follow strict provincial standards for safety, hygiene, and documentation.
• Advertising: Compounding services are not promoted to the general public but may be communicated to healthcare professionals
• Example: A pharmacy compounding a liquid formulation for a patient who cannot swallow tablets.

Key Distinction

The critical difference is that manufacturing involves mass production and federal oversight, while compounding is a patient-specific service regulated at the provincial level. Compounded products cannot be sold in bulk or resemble commercially available drugs, as this would be considered unauthorized manufacturing under Health Canada regulations.

Here are a few case examples illustrating the distinction between manufacturing and compounding in Canada:

Case 1: Mass Production vs. Patient-Specific Compounding

Scenario: A pharmaceutical company produces omeprazole 20 mg capsules in bulk for nationwide distribution.

• Classification: Manufacturing
• Why? The company follows Good Manufacturing Practices (GMP), obtains a Drug Identification Number (DIN), and distributes the drug through wholesalers and pharmacies.
• Regulatory Body: Health Canada

Scenario: A pharmacy technician prepares an omeprazole oral suspension for a pediatric patient who cannot swallow capsules.

• Classification: Compounding
• Why? The preparation is tailored to a specific patient’s needs and not available commercially.
• Regulatory Body: Provincial pharmacy regulatory authority (following NAPRA’s Model Standards).

Case 2: Unauthorized Manufacturing (Compounding Violation)

Scenario: A compounding pharmacy makes large batches of a compounded pain cream (ketoprofen, lidocaine, and diclofenac) and supplies it to multiple clinics.

• Classification: Unauthorized Manufacturing
• Why? Compounded products must be for an individual prescription. Mass production and resale of compounded products without a Drug Establishment Licence (DEL) violates Health Canada regulations.
• Regulatory Consequences: The pharmacy could face regulatory action for acting as an unlicensed manufacturer.

Case 3: Drug Shortage Compounding Exception

Scenario: A pharmaceutical company stops producing a critical thyroid medication due to supply chain issues, and no alternative is available in Canada.

• Regulatory Exception: Health Canada may allow compounding pharmacies to temporarily compound the drug in larger quantities under special approval.
• Why? This ensures continuity of care when no commercial alternative exists.
• Oversight: Provincial regulators and Health Canada monitor for compliance to prevent pharmacies from overstepping into unauthorized manufacturing.

Case 4: Veterinary Compounding vs. Manufacturing

Scenario: A veterinarian needs a customized antibiotic for a dog that cannot tolerate commercially available tablets. A compounding pharmacy prepares a flavored liquid formulation.

• Classification: Compounding
• Why? It is patient-specific (for the dog) and not available commercially.
• Regulatory Body: Provincial pharmacy regulatory authority & Canadian Food Inspection Agency (CFIA) for veterinary drugs.
• However, if a company produces large quantities of flavored antibiotics for multiple veterinary clinics, it would require Health Canada manufacturing approval

Key Takeaways

• Compounding is patient-specific and regulated provincially.
• Manufacturing is large-scale, requiring federal oversight (Health Canada).
• Unauthorized manufacturing occurs when a pharmacy produces compounded drugs in bulk for distribution beyond individual prescriptions.
• Regulatory exceptions exist, such as during drug shortages, but require special approvals