Health Crisis Highlights Value of Pharmacy Compounding

“Pharmacy compounding is the best option for many of our patients who have conditions or needs that are not met with manufactured medication and, in 2020, even more important,” said Almaz Dawit, PharmD, founder of CortexRx Compounding Pharmacy in La Jolla, California. “Compounding pharmacies have stepped up and provided much-needed sanitizer and other supplies that fell short due to COVID-19, highlighting the need for their existence even more.”

Although compounding has experienced a severe and drop in coverage by shortsighted payers, the events surrounding the COVID-19 pandemic have demonstrated the worth of having ready and capable compounding pharmacies, according to Jesse C. Dresser, Esq, partner at Frier Levitt, a pharmacy law group in New York. “From mixing hand sanitizer to ensuring a steady supply of [drugs] for patients in dire need, compounding pharmacies have more than proved their worth in the midst of this crisis,” he said. “But ultimately, the value and importance of pharmacy compounding in 2020 go far beyond safeguarding against medication shortages and continue to play a vital role in fulfilling unmet medication needs for individual patients and health systems alike.”

From nonsterile to sterile compounding, there has never been a greater need for flexibility while maintaining the highest safety standard, with the most robust policies and standard operating procedures to back it up, said AJ Rivosecchi, PharmD, director of clinical solutions at Kit Check.

“The situation pharmacies find themselves in with unpredictable, ongoing, and pervasive shortages has in many cases taken what may have been a decision on buying finished goods versus compounding based on ability and economics and made it a necessary reality of daily life to maintain standards of care,” Rivosecchi said. “Coupling this increased need with the rising regulatory bandwidth being paid to sterile, nonsterile, and hazardous compounding makes pharmacy compounding a top priority in terms of importance for pharmacies around the country.”

Understanding Regulations

From FDA-enforced current good manufacturing practices at the manufacturer level down to individual state boards, there is no dearth of regulations in the compounding space.

“The USP [United States Pharmacopoeial Convention] chapters 795, 797, and 800 are forefront on the minds of pharmacy leaders,” Rivosecchi said. “[USP general chapter] 795 covers nonsterile compounding, 797 covers sterile compounding, and 800 covers hazardous drug handling. This trio of regulations, when taken together, has had the biggest impact on the industry.”

Pending revisions to chapters 795 (last updated in 2014) and 797 (last updated in 2008), as well as the official adoption of chapter 800 on December 1, 2019, have guided decisions in the compounding space for the past decade. 

Between the proposed revisions and the official version of USP 800, the industry has never before had so much guidance for ensuring both patient and employee safety. Rivosecchi calls that a “real win” for the industry because it will help standardize best practices and prevent bad actors from skirting more lax regulations. However, these mandates are largely unfunded, and good actors, who aim for compliance and maintenance of best practices, may not have adequate capital to invest to meet new regulations.

“The USP, along with state agencies, regulators, and oversight organizations, [all affect] the industry; the difficulty for pharmacies is that there is no firm consensus of exactly what or when ultimate requirements will be stipulated and/or exactly how they will be enforced,” Rivosecchi said. “There is often significant capital expenditure, in excess of $500,000 even for a midsize hospital pharmacy, which accounts for millions within a health system, that is invested to meet requirements that do not yet exist.”

The biggest challenge the regulations pose to the industry is lack of clarity. For example, although traditional compounding pharmacies are directly regulated by state boards of pharmacy, which inspect, license, and discipline according to state police powers, the FDA retains jurisdiction to regulate the manufacture of new drugs.

“In examining whether a compounding pharmacy is engaged in the improper manufacture of drugs, the FDA’s authority and jurisdiction are often ill defined, and if the FDA determines, in its discretion, that the pharmacy is acting outside the scope of a traditional pharmacy, it may seek to apply higher standards more normally associated with drug manufacturing,” Dresser said. “This could, in turn, lead to additional and unforeseen disciplinary action being taken against the pharmacy.”

In lieu of promulgating formal regulations, the FDA has opted to issue industry guidance on intended regulatory enforcement. It has taken the FDA several years to “finalize” much of this guidance, Dresser said; at press time, the memorandum of understanding addressing the interstate distribution of compounded medications has not yet been finalized and adopted by states and the FDA.

Finding Success

Industry insiders noted that success in compounding involves understanding the landscape and asking key questions: “What does the market need? Where does it need it? How do I meet that need efficiently to allow me to comply with all relevant regulations?”

“To answer those questions, you must consider what’s already commercially available; what the FDA has deemed appropriate for compounding due to shortages; what is the cost of your materials, labor, and maintaining compliance; and, ultimately, where is the balance that makes all these things an attractive target and leads to success,” Rivosecchi said. “The demand is clearly there, so that much is known—the true key to being successful in this space, whether in a hospital or in a commercial application, is identifying what demand you can meet safely and efficiently.”

According to Dawit, success lies in the ability to meet the specific needs of patients who can pay cash for tailored medications and in being innovative and targeted when selecting products. She also noted the importance of visibility to practitioners who support patients whose needs are not met by typical retail pharmacy.

Dresser listed 3 crucial steps toward success: (1) Institute robust procedures that ensure compliance with all applicable forms of regulation. (2) Identify a workable business model in the wake of coverage restrictions. (3) Avoid common legal and regulatory pitfalls.

Entering the Field

Pharmacists who want to get involved in compounding should learn from their peers, according to Rivosecchi. “Whatever your focus will be—sterile, nonsterile, or hazardous—go find people who are doing it well and leverage their best practices and learnings,” he said. “No one will have a turnkey solution for you, but everyone in the field is doing something well, and being a true student of the competition can help you identify how to effectively enter this field in a manner that works for your focus.”

Dresser agrees: “There are many experienced consultants—clinical, business, and legal—who can help guide new pharmacies through this industry,” he said. “Taking proactive steps can help mitigate some of the known challenges, such as aggressive and heavy-handed [pharmacy benefit manager] and payer audits.”

Eager pharmacists need to study demographics and be able to educate local practitioners on what compounding involves, noted Dawit. “Compounding pharmacy allows me to help patients who have specific needs and are overall wanting to improve their health, not just treat a condition,” she said. “I like spending time getting to know my patients, and [it is] rewarding to be able to solve problems that are not addressed by big-box pharmacies. Independent ownership is difficult in this time but also has its advantages for those who want to think outside the box.”