Drug Shortages May Have a Compounding Solution: Q&A with Shawn Hodges

Shawn Hodges
CEO
Revelation Pharma

Shawn Hodges, CEO of Revelation Pharma, spoke with Pharmaceutical Executive about potential solutions to the ongoing drug shortage issues. According to him, compounding pharmacies may be the answer.

Pharmaceutical Executive: How serious is the current drug shortage situation?
Shawn Hodges: For the overall pharmaceutical industry, it has continued to grow. As of this year, there’s over 320 drugs on FDA’s drug shortage list. That’s one of the highest numbers in recent years, although there were some high numbers during the COVID-19 pandemic. It’s becoming a problem.

If you survey pharmacies, oncology clinics, or infectious disease clinics, there’s an overwhelming response that people have been impacted by not being able to access a particular drug. Due to that, they’re having to find ways to treat their patients using alternative methods, sometimes ones that they prefer not to do but they don’t always have a choice. Sometimes, selecting the alternative is better than nothing.

From the compound pharmaceutical industry, this is where it gets interesting. We see pharmacy compounding as part of the solution. If you look at the problem in general, the shortages are being caused by manufacturing problems, supply chain issues, economic factors, and regulatory issues. There are opportunities in certain instances where compounding pharmacies can fill the void until the manufacturers are able to produce the products.

For that to happen, however, that would require some regulatory changes. We would have to get FDA to get public and private entities in lock step on this, but there are opportunities for certain drugs that compounding pharmacies could provide on a local level or for local hospitals. This would be beneficial to the patients because it would provide them access to some of these hard-to-come-by therapies.

PE: What are the potential regulatory changes that would have to be addressed?
Hodges: There’s a good number of them that FDA could help resolve. The first is real-time updates. Right now, there is a lag if a drug goes on shortage. The drug manufacturers are required to report any sort of supply chain issues, but sometimes there is a disconnect from reporting from the manufacturer to FDA, and then in turn from FDA to all the stakeholders, whether it be hospitals or other supply chain users.

There needs to be a truncation of that where FDA must be more active about notifying the industry about potential drug shortages. The reason why that is important is because it will allow for other companies to pivot their resources to fill that gap.

Another thing that must happen is that FDA must allow for a mechanism for certain industries, such as compounding pharmacies, to say if they have access to the raw materials and the ability to manufacture certain drugs if there are shortages.

We’ve had this conversation with FDA before, but we think we’re starting to see some traction. There is potentially a bill coming that will speak to FDA updating its drug shortage list in real-time. Sometimes those reports can take as long as six months. A few years ago, a tornado took out a Pfizer plant and it took six months for FDA to report the resulting drug shortages. That’s a problem.

PE: Can you go into more detail about the role compounding pharmacies will play?
Hodges: If you look at the drug distribution system, 503A pharmacies are typical compounding, which is where the pharmacist makes the medicine and gives it to the patient. In the compounding industry, that only represents about one-to-three percent of drugs introduced to commerce. That doesn’t make it any less significant, however. The role of compounding is to serve those patients who couldn’t have their medical needs met by a manufacturer.

What happened in 2014 is that a new industry came about known as 503B in the drug quality securities act. Sometimes, there are certain products that are a little bit larger than what a typical 503A pharmacy can produce in terms of scale, but still small for the overall drug manufacturing industry. So, the 503B came about.

These 503Bs can engage with drug shortages now, and you’ll see some of the anti-infective drugs, chemo drugs, and others. Within that, there are certain roadblocks we think we can remove. These are related to barriers to entry.

Sometimes 503B pharmacies are hesitant to produce during shortages because they don’t know how long the drugs will be on the shortage list. If there is a sense that the drug will on the list for years, companies will invest into the production and testing, which can cost 100s of thousands of dollars.

What we need to do is look at certain drugs on the list and identify the ones that would not require so much aggressive testing. Right now, every facility must go through several months to a year’s worth of testing before they can start producing product. There are good reasons for that, but the reality is that certain drugs are very stable, and we don’t need to reinvent the wheel for testing every time. A good quality product can be made every time with certain assumptions based upon our knowledge of the product.