Pharmaceutical compounding is a branch of pharmacy that continues to play a crucial role in drug development. Compounding pharmacists and medicinal chemists develop and test pharmaceutical formulations for new drugs so that the active ingredients are effective, stable, easy to use, and acceptable to patients.

Physicians may prescribe an individually compounded medication for a patient with an unusual health need. This allows the physician to tailor a prescription to each individual. Compounding preparations are especially prevalent for:

• Patients requiring limited dosage strengths, such as a very small dose for infants
• Patients requiring a different formulation, such as turning a pill into a liquid or transdermal gel for people who can't swallow pills due to disability
• Patients requiring an allergen-free medication, such as one without gluten or colored dyes
• Patients who need drugs that have been discontinued by pharmaceutical manufacturers because of low profitability
• Patients who are taking hormone replacement therapy
• Children who want flavored additives in liquid drugs, usually so that the medication tastes like candy or fruit
• Veterinary medicine, for a change in dose, change to a more easily-administered form (such as from a pill to a liquid or transdermal gel), or to add a flavor more palatable to the animal.

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