Drug shortages are a boon to one industry- compounding pharmacies

Friends in the medical profession in USA and American newspapers have been highlighting severe drug shortages in the US. Although it is not clear why these drug shortages have kicked-in, as is usually the case with such shortages, opportunistic suppliers – several of whom are in India – are stepping up to take advantage of these shortages:

“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.”

Compounding is now a $5bn industry and it is attracting private equity investment: “Data from Premier, a major group-purchaser for U.S. hospitals, shows that its 4,400 members purchased 41% more products from outsourcing facilities in 2022 than in 2021, compared with roughly 4% between 2020 and 2021…About half of the lidocaine with epinephrine purchased by hospitals in June through hospital group purchaser Vizient was from compounding facilities, compared with none in October 2021, when the drug was entering shortage, the company’s data shows.

For ketamine hydrochloride, the supply from compounders jumped to about 70% in that same period from about 20%.”

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