OBJECTIVES: Pharmacies in hospital have adopted volumetric measurement for compounding intravenous (IV) medication for years, which is a multi-step process manually carried out by pharmacists and technicians. Compounding errors in each step can lead to consequences, such as medication wastage and additional time for re-compounding. In addition, compounding errors that go undetected and reach the patient can lead to preventable adverse drug events (pADEs). An Excel model was developed to articulate the clinical and economic burden during the IV compounding process. METHODS: A targeted literature review on IV medication errors (ME), medication wastage, and IV compounding labor was conducted using Medline (2003-2015), identifying seven key articles related to the incidence rates of compounding errors during the process for both chemotherapy and non-chemotherapy preparations. A literature review investigating cost of pADEs, medication wastage, and labor was also incorporated. RESULTS: A base scenario for a pharmacy with an annual 15 million USD spending on IV medication, and a total of 100,000 manually prepared IV admixtures was evaluated. The model estimated that of 7,100 compounding errors, 5,574 of the errors would be detected by the pharmacy, resulting in the re-compounding of 1,784 IV preparations. The re-compounded preparations are associated with costs of $241,024 in medication wastage and $23,537 in labor. The 1,527 compounding errors not detected by the pharmacy could result in 359 pADEs, with a total cost of $1,369,222. CONCLUSIONS: This model demonstrated the substantial impact of IV compounding errors that lead to pADEs, medication wastage, and unnecessary labor. The consequences were estimated to cost more than $1,633,783 per year, which is estimated to be >10% of the total hospital IV medication spending. Process standardization and evaluation of new IV preparations measurement methods, such as gravimetric-based medication workflow solutions, are needed to mitigate compounding errors at pharmacies.