Compounding - that is, mixing up pharmaceuticals in the appropriate form for dosing - used to be something that happened at the pharmacy. You can still find "compounding pharmacies" willing to do this - they'll mix up your stuff into a kid-friendly elixir, or prepare ointments, and the like. However, increasingly complex and fragile molecules in drugs (not to mention an increased level of caution) mean that the vast, vast majority of compounding is done at the pharmaceutical company level. This often means single-dose vials and the like, and we're probably safer for this, with the trade-off of increased prices.

Part of the problem with compounding drugs - elixirs in particular - is that drugs often aren't that soluble. Many drugs are administered as the HCl salt, and your stomach contains prodigious amounts of HCl as well. Both these help solubility. Plain water, however, often won't dissolve them so well. Administering drugs in a solution of concentrated isn't an option, and most organic solvents are toxic. Glycerine is often used to good effect here - it's nontoxic, and will help with solubility. Glycerine or propylene glycol are often found in such elixirs for this reason.

Diethylene glycol, however, is rather toxic. There's buzz in the news now that some unscrupulous, misinformed, or otherwise careless compounders may be using it in elixirs. Sadly, this isn't new.

In 1937, over 100 people died as a result of taking antibiotic elixirs prepared with diethylene glycol. This hastened the rise of an FDA with previously-unheard of regulatory powers. Incredibly, authorities recovered 97.6% of tainted drug after finding out things were going awry.