Home > Blog > The Quiet Rise of The Compounding Pharmacy

With the recent fungal meningitis outbreak, the compounding pharmacy has come front and center in the line of attack.  People are wondering how these pharmacies have evaded federal regulation, and as a result, we are likely to see changes in the way they are regulated.

But what has caused the rise of the compounding pharmacy?  How did this obscure business rise from a handful in 2000 to 3,000 in 2012?

The answer at least partially lies in a critical but little talked about problem in our health care system: drug shortages.

Before the rise of the pharmaceutical industry as we know it, these small compounding pharmacies were where most doctors and hospitals got their drugs.  But once the drug giants entered the picture, providing mass-produced and packaged drugs in ready-made doses, the compounding pharmacy nearly disappeared.

But then came the problem of drug shortages.  Despite the fact that these drugs were being produced by pharmaceutical giants, doctors and hospitals found crucial and life-saving medicines in short supply, including chemotherapy drugs and anesthesia medications.  In 2006 there were about 70 drugs in short supply.  Last year there were 267.  This created an opening for the reemergence of the compounding pharmacy.

These smaller pharmacies could produce much-needed drugs in their own facilities, and as this niche market opened up, the small compounding pharmacies grew to resemble big manufacturers, distributing their drugs across the country.

Regulation did not keep up.  The FDA did not step in and require compounding pharmacies to be subject to the same scrutiny as regular pharmaceutical companies.

While after all this attention it is likely that the laws will evolve to take the current realities of the pharmaceutical landscape into account, the issue of drug shortages will remain.  Drug shortages in our country have grown exponentially in the last years, and while the government is attempting to make changes to alleviate this problem, it is unclear whether the multidimensional problem is being addressed from all the angles necessary to affect a real change.

At Kirkendall Dwyer, we are interested in all aspects of the health care industry, and bringing you information that will affect positive change in your life.  For more information regarding drug shortages, click here.