Should You Consider Insourcing Sterile Compounds?
It’s no secret the compounding industry is and has been under heightened regulatory scrutiny. After the New England Compounding Center (NECC) tragedy and the birth of the Drug Quality and Security Act (DQSA) of 2013, state compounding regulations also began evolving to address an alarming level of errors and increased patient safety risk of using compounded sterile preparations. Many pharmacies and health systems engaged in sterile compounding suffered severe regulatory consequences including observations, warning letters and in some cases facility closures for not having sound quality systems in place to produce safe compounded preparations.
In the aftermath of tightened state and federal regulations and consequential soaring compliance costs, the price of outsourced sterile compounds have increased and at least two large 503B’s have recently closed their doors. In addition, while 503B outsourcing facilities were intended and endorsed by the FDA to be able to compound and distribute drugs on the current shortage list, many facilities cannot serve the gap quickly enough as it takes time to develop a compounded preparation with the required GMP validation, stability data, and documentation. In fact, the Office of Inspector General reported in 2019 that hospital’s needs are not being met by outsourcing facilities to effectively serve drug shortages.
With the inability of outsourcers to adequately serve shortages, along with diminishing cost advantages and shrinking national supplies of outsourced compounds, many health systems are beginning to analyze their current supply chain strategy and are revisiting the pros and cons of insourcing batched compounds.
So if outsourced sterile compounds are now too expensive and likely won’t be able to quickly address all of your drug shortage or batch compound needs, what’s the point in using them? Should your facility consider insourcing instead?
Pros and Cons of Insourcing Batch IV Compounding
Although implementing a batch IV compounding service can be difficult, expensive and lengthy, if done properly the benefits can far outweigh the effort.
Pros:
Cost Savings – Institutions that insource IV batch compounds can save hundreds of thousands of dollars a year over outsourced compounds in certain instances.
Autonomy – Insourcing allows the pharmacy or health system to maintain full control over the compounding process. There is less dependence on an outsourcer’s product availability, price, turn-around time, quality management systems, and regulatory compliance status that satisfy your facility’s requirements.
Flexibility – Outsourcers may be limited in their product offerings due to the strenuous demands of CGMP. It costs 503B’s tens of thousands of dollars to develop one product. The specific product attributes (i.e. concentration, package, volume, etc.) may not be exactly on your institution’s formulary. Pharmacies that batch compounded IV preparations are capable of producing a wide variety of compounds in a manner that exactly meets their unique needs.
Cons:
Expensive to Start and Run – Start-up costs of implementing an IV batch compounding program are high when considering the potential facility build-outs, equipment purchases, process automation technologies, personnel expansion and training, and consulting required to get going. Then, running the day-to-day operations of a highly regulated industry requires ongoing healthy capital injections.
Time Consuming Start-Up – The time required to implement an IV batch compounding service can be many months or longer if the facility construction project requires a large space and/or complex engineering. Depending on the location of construction and the current cleanroom space, non-batch compounding may be halted or redirected to a temporary space. Lead times of equipment purchases, additional pharmacy or business licensing (if needed), procedure development, and personnel training must also be accounted for and timed right to keep the project moving forward and able to be completed on time. Having a consultant lead the project will cut down on the start-up timeline and potential mistakes that can happen with a do-it-yourself approach but will add to the start-up costs.
Regulatory Compliance Hurdles – USP, BoP, FDA, DEA, TJC, ACHC, etc. The alphabet soup of compounding pharmacy standards and regulations continues to be difficult for industry leaders to implement processes that satisfy the numerous stances and requirements of each regulatory body. What often happens is the site decides to do the bare minimum and misses the mark for one or more regulations costing them time and money to remediate the regulatory consequences. Or the site goes well above and beyond the various requirements creating a costly and labor intensive operation.
Patient Safety Risks – The potential for compromised sterility and formulation/processing errors remains a challenge for sterile compounders. Manual aseptic processing modalities are the most risky of all sterile processing methods due to increased potential for operators to contaminate the product being in close proximity to the critical site, or for human error in formulation calculations, not following directions, or mis-labeling preparations. An IV batch error has far reaching effects as several units are released and dispensed to numerous end-users. Recalls and adverse drug events not only harm patient health, they cripple the organization in terms of litigation, defamation, and regulatory actions. Technology that automates the sterile compounding process, formulation checks, and proper labeling controls greatly reduces the risk of errors. Automation is costly to implement but ongoing costs become greatly reduced over time and institutions can reap a healthy return on investment.
Next Steps:
Given the benefits of insourcing sterile compounded preparations it may be worth examining your operation to enhance quality systems, optimize processes, and reduce costs. If you are interested in exploring the possibilities of insourcing IV batch compounding, take the following next steps:
1. Assemble a team of department decision-makers. Include a supply chain executive who has experience in analyzing and negotiating contracts.
2. Monitor the performance of the outsourcers you are currently using and ensure the services and products are being delivered as defined in the contract. If the vendor is not meeting their obligations seek another outsourcer or bring those services in-house.
3. Ask the following questions:
Is the 503B providing what they have been contracted to provide?
Are the products being delivered as promised?
Can we compound these preparations at or above the current standard or quality?
Can we compound these preparations at a lower cost?
Are any of the 503B’s products negatively impacting patient care?
Are the outsourced compounds being provided in a way that aligns with our mission and values?
Are we willing to assume the risk involved with IV batch compounds that are currently being outsourced?
What will it take to implement an IV batch compounding program and how much will it cost?
The decision to insource IV batch compounding is more than just about the numbers. Facility updates, equipment, automation, staffing, timeline and liability issues may lead a pharmacy or institution to decide to continue outsourcing IV batch compounds. Decision makers must consider all aspects of the compounds being outsourced and whether or not the benefits outweigh the risks.
If you want to assess the feasibility of bringing IV batch compounding in-house and analyze if you can save money while doing it, contact Restore Health Consulting for a complimentary introductory consultation.
References:
Murren S. Most Hospitals Obtain Compounded Drugs From Outsourcing Facilities, Which Must Meet FDA Quality Standards. U.S. Department of Health and Human Services, Office of Inspector General. June, 2019.
Bekri S, Dupart PC. Insourcing IV Compounding with Robotics. Pharm Purch Prod. 2017;14(3):S1-S2.
Hansen K, Kang K. Insourcing RTA Syringes with IV Robotics. Pharm Purch Prod. 2018;11(15):11.
Institute for Safe Medication Practices. Safe practices in pharmacy sterile compounding areas. ISMP Medication Safety Alert! 2011;16(11):1-4.