The US Pharmacopeia (USP) publishes official monographs for certain substances. These monographs include specific assay methods and product specifications to assure identity and potency. Material that is tested by these methods to meet those specifications is then eligible to be called pharmaceutical grade, or USP. The key concept is "standards and verification" http://www.usp.org/aboutUSP/ Many natural ingredients do not have published USP monographs, so cannot be called USP grade (as there are no USP specifications or standards to test against). Also, the testing is often a bit imprecise, so a test result for purity may be acceptable within a narrow range (from 98% - 101% of label potency, for example) and still be considered good. Another standard monograph is that found in the Food Chemicals Codex, desribing FCC food grade materials. A product with an FCC monograph can be tested to meet the food grade specifications that are typically less rigorous than those in a pharmaceutical monograph, but do provide standards for purity and identity. http://www.usp.org/fcc/ Some substances have both USP and FCC monographs and can claim both grades. For example, the amino acid l-arginine has monographs in both compendia, as do some other aminos.