Private equity firms and hospitals are investing in compounding pharmacies as hundreds of drug shortages afflict healthcare, The Wall Street Journal reported Aug. 7.
Compounding pharmacies are held to the same standards as generic and brand-name drug manufacturers, but unlike their counterparts, they don't require FDA approval to begin making a new drug. This can allow hospitals to get drugs in short supply sooner by months, according to the Journal.
"Almost every time there is a fear of some new shortage, we turn immediately to the compounders and say, 'What do you have for our needs for this?'" Eric Tichy, PharmD, division chair of pharmacy supply chain at Rochester, Minn.-based Mayo Clinic, told the outlet.
Despite quality concerns, the market for compounding pharmacies seems to be growing. By 2030, it's estimated to grow to be worth $8.8 billion, according to Global Market Insights.