The Potential in Compounding Pharmacy
There is a surge in demand in the pharmaceutical industry calling for in-house production of Active Pharmaceutical Ingredients (API) amid the COVID-19 pandemic and its impact on global drug supply chains. The already existing need has now become increasingly prevalent for the production of API within the USA. American drug manufacturers are the world leaders in drug design and research, yet the industry still heavily relies on importing the API from overseas. Certain contracts between manufacturers and Group Purchasing Organizations (GPOs) allow for contracts to be broken if a cheaper supplier option exists. This leads to the business model of existing manufactures to produce the cheapest available product in order to compete with other manufacturers. As a result, in order to stay competitive, the manufacturers are driven towards API production that is done at a cheaper cost at the expense of decrease quality controls. This has been linked by the FDA to impurities, drug shortages, and poor health-care outcomes.
This issue can pave the way for the compounding pharmacy industry and non-profit organization to take control by breaking the existing supply chain, promote in-home production, and create a significant financial impact. The compounding pharmacy world could be revolutionized by conducting business with non-profit organizations within the United states that produce API. Non-profit organizations, under the umbrella of the 501c3 designation, have the ability to produce products at lower costs which can be beneficial for compounding pharmacies and GPOs to create cheaper large-scale contracts while maintaining product integrity and increasing business in US soil. Non-profit organizations have the ability to rent out large-scale production centers at lower prices, purchase un-taxed starting material, and have unpaid volunteers. These factors make non-profit organization’s operational costs comparatively cheaper to help them become competitive with companies that rely on overseas production.
The potential cost saving for the compounding pharmacies will not only be limited to lower API cost but also increase product reliability. Many of the impurities that are regularly reported have to be traced back to each batch that was used and to whom it was dispensed. Having a more reliable API would positively impact compounding pharmacist’s everyday operations by reducing time spent on tracking recalled impure products and re-compounding products, which would increase production efficiency. Compounding pharmacies and non-profit organizations coming together can solve the FDA addressed problem with existing supply chains leading to a surge in impurities and drug shortages. Decreased impurities and increased reliable supply chains can shift compounding pharmacists’ focus more towards improving medication therapy management and improving health outcomes.
References:
- https://www.contractpharma.com/contents/view_online-exclusives/2020-03-05/api-supply-for-us-market/
- https://www.fda.gov/news-events/congressional-testimony/safeguarding-pharmaceutical-supply-chains-global-economy-10302019
- https://wayback.archive-it.org/7993/20191216101654/https:/www.fda.gov/media/132059/download
