Tell me more about Pharmacy Compounding. I'm interested in the market size, use cases, trends, regulatory environment and such. For the United States primarily.
Hello! Thanks for your question about the pharmacy compounding industry. The short answer is that the industry is worth $6 billion and is growing at a rate of 3.4%. Key drivers of growth include the increased elderly population, more disposable income, and price hikes on manufactured drugs. Compounded drugs are not FDA-approved, and are primarily regulated by state boards, unless the operation registers with the FDA as an outsourcing facility. You'll find a deep dive of my research below.
According to IBIS World, the compounding pharmacies industry in the US was worth $5.6 billion as of early 2015. The market was projected to grow at an annual growth rate of 3.4%. If that held true, the market would reach $6 billion this year. The market is projected to reach $6.4 billion by 2020. As of 2015, there were 5,513 businesses in this category in the US.
IBIS also provides a breakdown of the industry by product segment:
Pharmaceutical ingredient alteration: 35%
Currently unavailable pharmaceutical manufacturing: 20%
Pharmaceutical application alteration: 20%
Pharmaceutical dosage alteration: 15%
Specialized and pharmaceutical manufacturing: 10%
Moreover, the FDA gives specific examples of use cases for compounded drugs:
1. Patients with allergies to certain ingredients, such as dyes.
2. A patient who needs medicine in liquid form instead of pill.
3. Adjusting strength or dosage
4. Adjusting flavor to facilitate compliance.
TRENDS AND DRIVERS
Key drivers of growth in this industry include the growing elderly population in the US, who are more likely to have chronic illnesses and may need personalized medications. Another driver is drug shortages among pharmaceutical manufacturers, allowing compounding pharmacies to step in and fill the gap. A growth in disposable income is also driving the industry, as Americans have more money to spend on personalized drugs, such as those with custom flavors. Other drivers include an increased number of physician visits, leading to more prescriptions, and an increase in the number of household pets, as veterinary medicine is one key market segment for compounding pharmacies.
One especially big driver of growth in compounding pharmacies is price inflation for prescription drugs. This is generated some negative media attention recently, such as the recent price hike for EPI pens. A recent study found that the average annual cost of some specialty drugs to treat complex diseases like cancer can be more than the median U.S. household income. Some large pharmacies, like Walgreens, have increased their compounding operations and are responding to these price concerns by creating personalized medications for patients at a lower price than some of the brand name drugs. On the other hand, some compounded drugs can be even more expensive than their manufactured counterparts, which is causing some insurance companies to refuse to pay for them.
The short version is that compounded drugs are not FDA-approved, although the FDA is encouraging large-scale operators to register with the FDA and is increasing federal regulations. Compounding pharmacies are generally regulated by the state boards of pharmacy, which oversee them in compliance with section 503(a) and (b) of the FD&C Act.
The FDA does maintain some authority over these operations. For example, any misbranding, adulteration, or false advertising of the drugs compounded could result in violations of federal law. And as I mentioned above, firms can register with the FDA as outsourcing facilities, in which case they are regulated and inspected by the FDA. These facilities must comply with CGMP requirements. The Drug Enforcement Agency also has some oversight in the area of compounding pharmacies, regulating any controlled substances used in compounding, such as hydrocodone and amphetamines.
There was an update on regulations of compounding pharmacies just last week, when President Trump signed into law budget legislation that included language asking Congress to clarify some of the regulations of compounding pharmacies that are part of the Drug Quality and Security Act of 2013. The language calls on the FDA and Congress to do three specific things:
1. Draft a memorandum of understanding that allows pharmacies that meet all other requirements of 503A to “distribute” compounded products over state lines.
2. Draft new guidance to allow pharmacists to compound for “office use” in anticipation of receiving patient-specific prescriptions at a later time.
3. Acknowledge that pharmacies compounding under 503A are the purview of state boards of pharmacy and are not to be held to current Good Manufacturing Practices (cGMPs). CONCLUSION
To wrap up, I've provided an overview of the $6 billion compounding pharmacy industry in the U.S. I hope this information is helpful to you! Thanks for using Wonder, and let us know if we can help you with anything else.