Compounding Pharmacies Market

Market Overview

Compounding pharmacies differ from conventional pharmacies in terms of drug composition. The role of compounding pharmacies is to develop drugs that are prescribed as per the specific needs of the patients. Since the last few years, the process of compounding drugs has been upgraded, which has allowed pharmacies to deliver advanced compounding services. The compounded drug products are sold directly to the customers through prescriptions or via hospital pharmacies. These personalized compounded drugs are commonly used in various therapeutic areas.

The global compounding pharmacies market size was valued at USD 9.87 billion in 2019 and is estimated to grow at a CAGR of 5.7% during the forecast period 2020–2029.

Market Dynamics

Compound Pharmacy — Indispensable Aspect of the Pharmaceutical Sector

The origin of the compounding pharmacies industry can be traced back to the 19th century. In the early 1900s, physicians used to prescribe compounding medicines for personalized therapeutic use. Since then, compounding pharmacies have become an indispensable part of the pharmaceutical industry. Even though the industry witnessed significant growth, the requirement for compounding drug products has declined as a result of the emergence of prominent drug manufacturers. In light of the advent of advanced technology solutions, the compounding medicines market will experience multiple growth opportunities.

The Burgeoning Geriatric Population to Boost the Adoption Rate of Compound Medicines

The burgeoning geriatric population and raised life expectancy have bolstered the adoption rate of personalized medicines across the world. The market for Compounding Pharmacies is expected to boom, owing to the increasing aging baby boomers population in need of personalized medications due to the growing incidents of chronic ailment among this population. According to the U.S. population bulletin, the age group 65 and above is expected to double from 46 million by 2060. The extended life expectancy in geriatrics has also spurred the number of health-related cases. According to the human development index, the life expectancy for the U.S. in 2019 was 78.87 years, and about 60% of this population needs personalized medication due to their declining immunity level. This is expected to drive demand for compounded pharmacy services at homes for memory loss, chronic illnesses, and post-hospital healthcare.

Compounding Pharmacies Facilitates Personalized Treatment Solutions

Convenience and reliability of using compounded medicinal products is the primary factor driving the compounded pharmacy market. If the patients fail to take the commercially available medicine or demand a discontinued medication, a licensed pharmacist can reformulate the medication by compounding. Sometimes patients do not respond to the conventional means of treatment or need their medicinal therapy in a different manner. Compounding medicines addresses these needs by offering personalized treatments for the needs of each patient, making it not only helpful to the consumers but also for the pharmacy. Benefits associated with compounding pharmacies, such as it allows access to discontinued medications, make medication easier to use; for example, in the case of pediatrics, pleasant flavors can be added to increase the adoption rate of medicines, and it makes drug products free from allergies.

The paucity of drugs and the growing rate of recalls in developed as well as developing regions are expected to provide an impetus to the Compounding Pharmacies market growth. Developed regions such as North America and Europe have undergone significant drug shortages in recent years. Reason can be inconsistent supplies of raw materials, issues with product quality, and delays in the process. Drug shortages result in severe consequences, such as patient death. Lack of timely availability of standard drugs is slated to stimulate the demand for compounded medication. The recently released report from the Drug Shortages Task Force highlighted 163 drugs that went into shortage during 2013–2017. Also, it cited reasons such as lack of incentives to produce less-profitable drugs, and logistical, and regulatory headwinds. Drug product recalls are most common in the pharmaceutical industry; in 2018 alone, 84 companies in the U.S. reported at least one drug product recall. This trend in the conventional pharmaceutical drug market is expected to drive the market for Compounding Pharmacies.

Segmental Analysis

Oral Compound Drugs — Convenient and Accurate Dose Regimen

The oral compounded medication is on high demand on account of easy administration and convenient compounding with an accurate dose regimen. The oral compounding drugs segment acquired a 33% revenue share in 2018 and is expected to gain traction due to the associated benefits; some of the advantages include ease of ingestion, good patient compliance, safety, and minimal pain. Besides, oral compounded drugs have a remarkable shelf-life that increases patient acceptance. Furthermore, oral compounded medications have proved their high-efficiency during several pharmacokinetic studies.

Topical medications are projected to report significant growth during the forecast period, owing to the growing demand for dermatological medications and the rising market demand for hormone replacement therapies.

Growing Health Consciousness to Bolster the Nutritional Supplement Segment’s Growth

The nutritional supplements segment will capture significant market share attributed to the growing health consciousness among the general population. People living in urban areas with sedentary lifestyles are prone to obesity-related disorders. Such problems have compelled people to visit physicians for treatment. Physicians are prescribing compounded nutritional supplements to help solve chronic dietary issues, thereby positively influencing the market trend.

The PDA Segment to Observe Fast Growth Rate

The PDA segment is expected to observe a fast growth rate during the assessment period. As compounding practices are generally followed for the pediatric and geriatric patient pool, difficulty in swallowing and challenges for medication management on a regular basis are the factors responsible for the increased adoption rate of PDA compounding practices.

Geriatric Population’s Inclination Toward Compounded Drugs

Pediatric and geriatric end-users dominate the current Compounding Pharmacies market, owing to the higher adoption rate and demand for alterations in forms of medicines. The adult population has shown an inclination toward compounded drugs during the last few years on account of the increasing demand for topical dermatological preparations and nutritional supplements. Moreover, the adult population suffering from chronic diseases such as cancer, diabetes, and others highly demand personalized medications. These compounded medicines are also free of any allergy that further stimulates their demand, thereby accelerating market growth.

Impact of covid-19

The recent outbreak of coronavirus (COVID 19) will have a profound impact on compound pharmacy practices as many general pharmacies are closing their receptions and limiting appointments for patients or switching them to on-line consultations; compounding pharmacies will undergo immense pressure and increased risk. Recently, in March 2020, the U.S. national formulary released guidelines to compound alcohol-based hand sanitizers to address the shortages. These alcohol-based sanitizers will contain a concentration of at least 60% ethanol or 70% isopropyl alcohol, which will inactivate the viruses.

Regional Analysis

Acceptance of Personalized Medicines and Drug Shortage in North America

North America is foreseen to dominate the global Compounding Pharmacies market by holding maximum share, primarily backed by the growing acceptance of personalized medicines and alarming drug shortage in the region. Similarly, the region also witnessed substantial growth in the hormonal therapy segment due to the high demand for compounded bioidentical menopausal hormone therapy (BMHT) among women. Within North America, the U.S. is expected to hold the largest share in the Compounding Pharmacies market, owing to favorable government regulations. The FDA has designated 503A and 503B compounding pharmacies — 503A compounding pharmacies are referred by the FDA as a traditional Compounding Pharmacies that compounds in accordance with patient-specific prescriptions and is required by the state boards of pharmacy to comply with USP standards. On the other hand, 503B compounding pharmacies are referred by the FDA as an outsourcing facility that may produce large batches with or without prescriptions to be sold to healthcare facilities.

The Nutritional Segment’s Crucial Role in Europe

Following North America, Europe is the second-largest Compounding Pharmacies market. The nutritional supplements segment plays a vital role in compounding pharmacies in European countries like the U.K., Germany, France, Spain, Italy, Benelux, and Russia. This can be attributed to lifestyle disorders like obesity, diabetes, and others. The shortage of drugs and the lack of timely availability of standard drug products are the primary factors that are expected to stimulate the demand for compounded medications among developed regions.

Japan and India to Accelerate the Asia-Pacific Compound Pharmacy Market Growth

Asia-Pacific is expected to witness significant growth in the coming years for compounded medications. Countries such as China, India, Japan, and Korea are expected to bring forth lucrative growth opportunities for compounding pharmacies, owing to the burgeoning elderly population suffering from chronic ailments that uptick the demand for compounded drugs, thereby establishing favorable regulatory scenario. Japan compounding pharmacies are predicted to experience considerable growth as physicians are prescribing compounded drugs that are customized in accordance with the elderly population’s requirements and specific needs. In India, the pain management segment is expected to gain traction for compounded pharmacies in light of the rising geriatric population suffering from arthritis, as per Arthritis India society.

South America also possesses lucrative growth opportunities for compounding pharmacies, owing to improving healthcare infrastructure in countries like Brazil and Argentina. Brazil is expected to gain considerable market share in the Compounding Pharmacies market.

The Middle East and Africa Region’s Poor Healthcare Infrastructure

The Middle East and Africa region is expected to witness a steady growth rate for compounding pharmacies due to poor healthcare infrastructure and limited adoption rate of compounding medications. Economic disturbances in the Africa region and the number of least developed countries hamper the adoption rate of compounding medications on account of the lack of awareness among the people.

Recent Developments

1. In July 2015, Fagron acquired JCB labs, intending to redesign the United States’ sterile compounding pharmacies. This acquisition has made Fagron one of the high-quality sterile compoundings manufacturers in North America. 
2. In April 2017, Fresenius Kabi acquired Merck KGaA and Akorn’s Compounding Pharmacies business. This acquisition has diversified and strengthened the product portfolio for Fresenius Kabi.

Compounding Pharmacies Market Segmentation

By Dosage Forms

• Solid oral preparations
• Liquid preparations
• Topical
• Ophthalmic
• Nasal
• Others

By Therapeutic Area

• Hormone Replacement
• Pain Management
• Dermatology applications
• Specialty drugs
• Nutritional supplements
• Others

By Compounding Type

• Pharmaceutical ingredient alteration (PIA),
• Pharmaceutical application alteration (PAA),
• Currently unavailable pharmaceutical manufacturing (CUPM)
• Pharmaceutical dosage alteration (PDA)
• Specialized animal pharmaceutical manufacturing (SAPM)

By End-Users

• Adult
• Pediatric
• Geriatric
• Veterinary