Drug Shortages Are a Boon to One Industry: Compounding Pharmacies

August 7, 2023

Relentless drug shortages are fueling a niche sector that operates outside the realm of the traditional pharmaceutical industry: compounding pharmacies.

Large-scale compounders, which make custom versions of medicines in bulk without individual prescriptions, are filling more of the demand for crucial drugs such as pain medications and respiratory treatments, hospitals, pharmacists and industry officials say. Compounding facilities are also supplying more anesthetics, including lidocaine and ketamine hydrochloride.

More than half of the 1,100 members of the American Society of Health-System Pharmacists surveyed recently said they increased purchases from large compounders—known as outsourcing facilities—because of drug shortages, according to the professional organization.

“Almost every time there is a fear of some new shortage, we turn immediately to the compounders and say, ‘What do you have for our needs for this?’” said Eric Tichy, who leads the medical supply chain at Mayo Clinic, which is using compounders to source widely used blood-pressure drugs.

The demand is turning bulk compounding into an attractive business. As shortages become more widespread, more drug manufacturers are expanding into the market, while compounding businesses are drawing investments from private equity, venture capital and hospitals.

The Food and Drug Administration in 2021 estimated the bulk compounding market to be as high as $4.6 billion and growing.

Bulk compounders usually make custom versions of medicines, such as anesthetic drugs in ready-to-go syringes, without individual prescriptions. But they can also make copies of existing drugs that are deemed to be in shortage by the FDA.

Large compounding facilities must follow the same manufacturing rules as generic drugmakers. But they don’t need approval from the FDA to start making a drug, so they can deliver drugs to hospitals in a matter of weeks or months, rather than the years often needed for the regulatory steps that come with commercial generic drugs....

continue reading to see how manufacturers, like Nephron Pharmaceuticals Corporation and The Ritedose Corporation, in the Central SC Region are being tapped to fill the shortcomings in supplies ➤ via The Wall Street Journal