503B Outsourcing Facility Market Insights: A Summary of the FDA 2022 Landscape Study Survey
Background: What is the FDA Compounding Quality Center of Excellence?
The Food and Drug Administration (FDA) established a Compounding Quality Center of Excellence (COE) in December 2019 to help develop programs that promote “quality, education, research, and communication on compounded drugs.” 503Bs and stakeholders can take training on-demand, join live instruction classes, or attend the annual (virtual) conference. Outsourcing facilities can also participate in listening sessions with the FDA as part of stakeholder engagement.
2022 Annual Conference Overview
FDA’s Compounding Quality Center of Excellence recently hosted the annual virtual conference on September 6 – 8, 2022, where they discussed compounding excellence, compounding guidance, patient collaboration, and what it means to stakeholders and pharmacy leaders.
The theme of this year’s conference was, “The Shared Pursuit of Compounding Excellence.” The event emphasized outsourcing facilities and highlighted how stakeholders could protect patients from unsafe, ineffective, and poor-quality compounded drugs while preserving access to compounded drugs for patients with medical needs.
The meeting featured interactive sessions, round table discussions, and subject matter expert presentations. During the convention, attendees could engage with FDA and learn more about compounding excellence, emerging trends, and quality compounding insights.
According to the FDA’s conference website, the intended audience included:
Outsourcing facilities—management and staff
Compounders interested in becoming outsourcing facilities
State pharmacy regulators
Hospitals utilizing compounding facilities
Suppliers of APIs and other materials and supplies to outsourcing facilities
Customers of outsourcing facilities (hospitals, clinics, ambulatory centers, group purchasing organizations, etc.)
Consultants focused on outsourcing facilities and compounding pharmacies
General public and healthcare professionals interested in outsourcing facility topics
FDA Presents 503B Market Findings at the 2022 Annual Conference
The FDA’s Compounding Quality Center of Excellence conference dialogue included panel discussions with external stakeholders where they discussed the areas of need for drug products compounded by outsourcing facilities, including FDA-sponsored research on stakeholder perspectives.
Data presented by the FDA includes information from the “State of the Outsourcing Facility Sector and Possibilities for the Future” which was shared at the 2021 Center of Excellence Annual Conference.
The information below represents material from the conference and includes data from the 503B Market Landscape Study conducted by the FDA in 2022. These points include emerging compounding trends and key industry insights shared by FDA.
Customers of 503B Compounded Products
As part of the 2022 Landscape Study Survey, FDA asked 503Bs, “What types of practice settings receive your 503B compounded products?” 503Bs were able to respond with multiple customer categories. The figures below represent the types of practice settings that purchase compounded products from 503Bs. According to findings, outsourcing facilities serve a very broad range of customers.
Major Customer Areas of Need for Outsourcing Facility Products
As found in the survey, some practice settings (e.g., independent hospitals / medical centers, etc.) utilize 503Bs more than others (e.g., nursing homes, etc.).
FDA found the major customer areas of need for outsourcing facility products are as follows:
Hospital and Health systems
Clinics
Ophthalmology
Dermatology
Surgery Centers
Infusion Centers
Specific Product Needs by Market Sector
As part of the 2022 Landscape Study Survey, stakeholders within specific practice settings expressed their needs for 503B compounded drug products. They are as follows:
Hospitals & Health Systems
Sterile products beyond the production capabilities of their in-house pharmacies
High volume products
Products with longer beyond use dates
Examples: Sterile operating room syringes, sedatives, paralytics, narcotics, antibiotics, total parental nutrition, and epidurals
Ophthalmology Clinics
Specialized sterile formulations (e.g., mostly topical drops, some injectable formulations)
Highly specific formulations (e.g., small batch sizes, wide variety of formulations)
Examples: Antibiotics for ocular use and repackaged bevacizumab (Avastin)
Dermatology Clinics
Specialized formulations of non-sterile topical products (creams, gels, etc.)
Generally require small batches and low product volume
Formula preferences can vary among physician practices and individual physicians
Example product: topical local anesthetic preparations
Surgery Centers
Often lack equipment for sterile compounding
Need moderate to large volumes of products
Examples: sterile operating room syringes and/or sterile injectables for anesthesia, narcotics, antibiotics, etc.
Infusion Centers
Serve outpatients or home settings by providing IV products
Require very high product volumes
Examples: electrolytes for total parental nutrition, antibiotics, antivirals, chemotherapy, etc.
Based on the overview of 503B customers and their expressed needs, a major theme in the survey results is the heterogeneity of product need. The need for product volume varies widely from very high (especially within infusion centers and health systems) to very low (e.g., ophthalmology and dermatology). There is also a broad diversity in product needs ranging from standard therapeutics (anesthetics, narcotics, antibiotics, etc.) in hospital and ambulatory settings to highly specialized products for individual physician practices.
Which Products are Outsourcing Facilities Supplying Specifically?
Based on mandatory 503B product data reported to the Agency biannually, five therapeutic areas comprise approximately 70% of the total 503B reported product volume – cardiovascular, anesthesia, reproductive, analgesia, and ophthalmology. These findings align with the reported product needs of customers that utilize higher volume of products (e.g., hospitals, health systems, surgery centers, etc.). The top ten drugs supplied by outsourcing facilities were found to be: phenylephrine, norepinephrine, rocuronium, lidocaine, oxytocin, testosterone, fentanyl, hydromorphone, bevacizumab, and moxifloxacin. Antibiotics (notably vancomycin) were also frequently mentioned but did not make the top ten list.
Challenges Faced by Customers
FDA also analyzed the challenges faced by customers that purchase compounded products from 503Bs. The following trends were reported:
Small volume products are less often supplied or difficult to source.
Not many outsourcing facilities specialize in dermatology products because they are typically non-sterile preparations.
Individual customers often utilize multiple outsourcing facilities to meet product needs. This is because:
The needs for high volume products outstrip the production capacity of an individual outsourcing facility;
No single outsourcing facility has a sufficiently broad product portfolio to provide all needed drugs; and
Supply from outsourcing facilities can be inconsistent at times, requiring customers to identify a back-up outsourcer to ensure constant supply.
Outsourcing Facility Challenges
Similarly, FDA explored the challenges that 503Bs experience and found the following issues:
There is a lack of standardization of products between customers. Different hospitals, health systems, and clinics prefer different formulations of similar drugs compelling outsourcing facilities to tailor products to individual customers.
Outsourcing facilities find it difficult to justify the production costs of specialty products (e.g., ophthalmics) due to small batch sizes.
Sensitive to supply chain disruptions for APIs, vials, and other supplies that can cause production inconsistencies.
Continued “growing pains” regarding quality and CGMP compliance can cause disruptions in supply.
As summarized by FDA and Shareholder Perspectives on Areas of Need for Outsourcing Facility Products:
Outsourcing facilities serve an extensive array of diverse customers, most with specific needs.
Customers use outsourcing facilities to meet their needs and fill in the gaps that they are unable to get internally or from other commercial products. Even though both outsourcing facility supplies and customers’ needs are a good match, both parties will continue to face challenges.
Does Your Facility Produce Quality Preparations?
If you’re ready to bring quality to the center of your compounding operations, consultants at Restore Health Consulting LLC can help you design a robust quality management system to promote patient safety and regulatory compliance.
Resources:
2021 Compounding Quality Center of Excellence Virtual Conference: Culture of Quality
Agenda | Compounding Quality Center of Excellence 2022 Virtual Conference
Compounding Quality Center of Excellence
Compounding Quality Center of Excellence Annual Conference
Compounding Quality Center of Excellence On-demand Training
State of the Outsourcing Facility Sector and Possibilities for the Future
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