A compounded medication is one prepared by a compounding pharmacist to match a specific prescription, rather than supplied as a mass produced product. Compounding can combine actives, adjust strengths or change the delivery form, such as a topical solution tailored for hair loss.
In Australia, compounded medicines are made under TGA and pharmacy board rules and still require a valid prescription. They are used when a registered product does not fit the clinical need, and the prescribing doctor monitors response as with any medicine.