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This article was published in Dermatology Times on January 15, 2020. It is reprinted here with permission.
We have all been there: An advertisement on television or a pop-up on Facebook beckons us to try the latest “visit-free,” “delivered to your door” treatment for a medical condition. This new model of targeted, direct-to-home commercialization of drugs is radically altering the pharmaceutical industry. The change is perhaps best illustrated by the tremendous success of Hims, Inc., which is responsible for ForHims.com and ForHers.com.
You want oral contraceptive medications without an appointment? There’s Nurx or Pill Club. Going through menopause? Try Rory. Need medical help to quit smoking? Zero has you covered. Get migraines? Cove can get you anti-emetics and even triptan medications in minutes. More groundbreaking and potentially disruptive to the existing health care model, however, is the rise of companies that offer custom-compounded, direct-to-consumer medicine.
These companies appeal to consumer demand for personalization, in addition to convenience and discretion. For example, Curology.com compounds its own prescription acne formulations in-house for individual patients. ForHers.com and ClearifiRx.com offer compounded treatments for skin lightening from third party compounding pharmacies. While still limited to offering previously approved active pharmaceutical ingredients, these companies have the potential to seriously upend the traditional prescription drug sales model through lower prices and novel formulations.
So why are all of these services emerging now? While compounding has always been a potential threat to repurposed or specialized innovation in the pharmaceutical space, statutory limitations on traditional compounding pharmacies related to batch formulating and interstate commerce rendered them competitive only in theory. However, a number of factors have coalesced over the last decade to allow these traditional compounding pharmacies, often referred to as “503As” because of the federal statute that regulates them, to thrive.
First, there is now substantial demand for these services. Our society has undergone seismic shifts in both our technological capacity, and also our expectations of various industries we interact with. We want our bedding to be customized to us, our shavers and toothbrushes sent to our doors and our television preferences noted and adjusted monthly by subscription services. We want Smile Direct Club to send us personalized aligners without seeing a dentist. It seems obvious, therefore, that medicine was unlikely to remain a sanctified industry insulated from this demand for consumer convenience and personalization.
Second, with a valid prescription, 503A pharmacies can compound any approved medications. They are permitted to formulate in small batches based on the prescribing history for the pharmacy and the prescriber. Taking advantage of the new market opportunity for personalized medicine, several savvy players have established licenses to dispense in all 50 states and started to specialize in the production and packaging of customized formulations made to order.
And just like that a previously substantial production barrier to entry for physicians and others wishing to enter the prescription medication market has now been downgraded to a small speed bump. As a result, the annual growth rate of compounding pharmacies is expected to increase 9-10 percent year over year, potentially becoming a $20 billion industry as early as 2020.
So, how should health care consumers feel about direct-to-consumer online companies compounding their own prescription formulations? Given the complexities and risks of prescription medications, protections are clearly necessary to ensure the public is not exposed to undue harm. There are commercial and legal implications to be considered. Off-label promotion although arguably protected commercial free speech is considered problematic from a regulatory perspective and patent infringement needs to be considered. Thankfully, the oversite of compounding pharmacies is already rigorous and we expect to see more FDA and FTC engagement as this nascent industry expands.
Clearly, the line between highly regulated, approved drug combinations and unregulated compounded formulations has begun to blur. In this way, compounding pharmacies are already beginning to erode the fabric of regulated pharmaceuticals, particularly for repurposed drugs. While there is a possibility that patients may receive ineffectual or minimally active forms of medication from suboptimal compounded medicines, if they are willing to take the chance, it may be considered unnecessarily paternalistic to resist allowing them the option to seek treatment.
Moreover, it should be acknowledged that there are certain common medical conditions for which a formulaic online telemedicine consultation is especially well-suited and for which custom-compounded medications can provide better safety and efficacy compared to labeled and commercially available products. This is particularly applicable to the field of dermatology, an area of medicine with considerable historic experience with compounding.
In fact, with respect to dermatology, beyond providing an alternative to certain outrageously priced legacy prescription medications, this model simultaneous addresses the additional pressing issue of access to care. A 2019 report by the ‘Greater Access for Patients Partnership’ (GAPP) highlighted the dire state of dermatology appointment wait times in the U.S., with the average wait time having increased from 22 days in 2009 to over 32 days in 2017. The report emphasized that delays in treatment for common skin conditions can result in interference in daily life for 61 percent of patients, and anxiety regarding their skin condition worsening for 58 percent of patients.
In the technological and societal climate in which we live, every industry is feeling the pressure of commercial competitors who are seeking to leverage newly developed technologies to disrupt stagnant practice models with agile, convenient and personalized alternatives. These pressures are becoming especially acute in the field of medicine where increasing numbers of high-deductible insurance plans with restrictive drug formularies are causing patients to pay more out of pocket for ever more expensive medicines.
While one of the last to fall, medicine is no longer somehow “off limits.” We believe the ripple effect of the growth in compounding is in its infancy. Rules, laws and regulations have and will likely continue emerge to address egregious safety concerns. But make no mistake, compounding is necessary and benefits millions of patients. It is also generally considered safe (especially for topicals). Given the overwhelming utility to patients, the trend may prove difficult to stop. Both figuratively and literally, for an increasingly unhealthy patient care and pharmaceutical model, it seems to be exactly what the doctor has ordered.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.