Company: HROW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000925
Chunk: 3

Company: HARROW, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 3
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 patented
or patent-pending, that are customizable for the specific needs of a patient. We make our formulations available at prices that are,
in most cases, lower than non-customized commercial drugs. ImprimisRx’s customer base has grown to include more than 10,000 U.S.
eyecare-dedicated prescribers and institutions. 

 5 

Pharmaceutical Compounding 

Pharmaceutical
compounding is the science of combining different active pharmaceutical ingredients (APIs), all of which are approved by the FDA (either
as a finished form product or as a bulk drug ingredient), and excipients to create specialized pharmaceutical preparations. Physicians
and healthcare institutions use compounded drugs when commercially available drugs do not optimally treat a patient’s needs. In
many cases, compounded drugs, such as ours, have wide market utility and may be clinically appropriate for large patient populations.
Examples of compounded formulations include medications with alternative dosage strengths or unique dosage forms, such as topical creams
or gels, suspensions, or solutions with more tolerable drug delivery vehicles.

Sales
revenue from our compounded products are derived from us making, selling and dispensing our compounded prescription drug formulations
as cash payment transactions between us and our end-user customers. As such, the majority of our commercial transactions for compounded
products do not involve distributors, wholesalers, insurance companies, pharmacy benefit managers or other middle parties. In regard
to our compounded formulations, by not being reliant on insurance company formulary inclusion and pharmacy benefit manager payment clawbacks,
we are able to simplify the prescription transaction process. We believe the outcome of our compounding business model is a simple transaction,
involving a patient-in-need, a physician’s diagnosis, a fair price and great service for a quality pharmaceutical product. 

ImprimisRx Compounding Facilities 

Pharmaceutical compounding businesses
are governed by Sections 503A and 503B of the FDCA. Section 503A of the Federal Food, Drug and Cosmetic Act (the “FDCA”)
provides that a pharmacy is only permitted to compound a drug for an individually identified patient based on a prescription for the
patient and is only permitted to distribute the drug interstate if the pharmacy is licensed to do so in the states where it is compounded
and where the medication is received. 

Section
503B of the FDCA provides that a pharmacy engaged in preparing sterile compounded drug formulations may voluntarily elect to register
as an “outsourcing facility.” Outsourcing facilities are permitted to