Center of Excellence

Areas of Customer Need for Outsourcing 

Facility Products

Meghan Murphy, PhD

September 7, 2022
2

Information Sources for Today’s Talk

• The Compounding Quality Center of Excellence Landscape Study

– Analysis of data

– Annual surveys of outsourcing facilities

– The contractor’s conversations with outsourcing facilities and other 

stakeholders

• Listening sessions and other conversations

• All research in the Landscape Study is conducted by a contractor 

through their direct engagement with outsourcing facilities and 

other stakeholders. The results are reported to FDA by the contractor in an 

anonymized manner. The research results reflect only the views of the 

research participants.

• The information in this presentation describes perspectives shared by 

stakeholders. This is a reporting of information from the stakeholders and 

does not necessarily represent FDA’s opinions nor has FDA independently 

verified the accuracy of the information.
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Background

• The outsourcing facility industry is still relatively young 

and evolving and, as such, serves a wide variety of 

customers

• Customer needs range broadly in terms of individual 

products and product volume

• Customers and outsourcing facilities often work together 

in an effort to match customer need with outsourcing 

facility capabilities
4

Overview

• Major customer areas and product needs reported 

for each

• Products most frequently produced by outsourcing 

facilities

• Challenges faced by customers

• Challenges faced by outsourcing facilities

www.fda.gov
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Cross-Section of Outsourcing Facility 

Customers

Q: What types of practice settings receive your 503B compounded products?

(From 2022 Landscape Study Survey) 

N=96

19

16

12

0

15

12

1

4 3

5

1

6

2

0

2

4

6

8

10

12

14

16

18

20

Independent

hospital(s)/Medic

al center(s)

Physician

office(s)

Clinic(s)

Nursing Home(s)

Health

system(s)/Integra

ted delivery...

Surgery center(s)

Ambulatory care

center

(Outpatient Care)

Pharmacy

services

Veterinary

services

Wellness clinic(s)

Refineries

Infusion therapy

centers

Other

Number of Occurrences
6

Major Customer Areas

• Hospital and Health Systems

• Clinics

– Ophthalmology

– Dermatology

• Surgery Centers

• Infusion Centers
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Hospitals and Health Systems

• Need for sterile products beyond the 

compounding/production capabilities of in-house pharmacies

• Generally need high volume of products

• Desire to utilize longer beyond use dates for outsourcing 

facility products compared to in-house or 503A pharmacy

• Example products: sterile operating room syringes, sedatives, 

paralytics, narcotics, antibiotics, total parental nutrition, and 

epidurals
8

Hospitals and Health Systems—

Special Cases

• GPOs utilize outsourcing facilities for various 

products to broaden their portfolios

• Children’s hospitals have product needs 

centered on specialized dosing for pediatric 

patients
9

Clinics—Ophthalmology Products

• Specialized sterile formulations, most often topical 

drops but can also include injectable formulations

• Formulation preferences can vary between 

individual ophthalmology practices and individual 

ophthalmologists, lending to small batch 

sizes/volume of product

• Products commonly utilized include antibiotics for 

ocular use and repackaged bevacizumab (Avastin)
10

Clinics—Dermatology Products 

• Specialized formulations of non-sterile, topical products 

(creams, gels, etc.)

• Generally small batch sizes and low product volume

• Formulation preferences can vary among physician 

practices and individual physicians

• Example product: topical local anesthetic preparations 
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Surgery Centers

• Often lack equipment for sterile compounding 

• Need moderate to large volume of products

• Example products: sterile operating room 

syringes and/or sterile injectables for 

anesthesia, narcotics, antibiotics 
12

Infusion Centers

• Serve outpatient or home settings by providing 

IV products

• Require very high product volumes

• Example products: electrolytes for total 

parental nutrition, antibiotics, antivirals, 

chemotherapy
13

Overall Heterogeneity of Product Needs

• Need for product volume varies widely from very 

high volume (infusion centers, health systems) to 

low volume (ophthalmology and dermatology 

specialty products)

• Broad diversity in product needs ranging from 

standard therapeutics (anesthetics, narcotics, 

antibiotics) in hospital and ambulatory settings to 

highly specialized products for individual physician 

practices
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What are Outsourcing Facilities 

Supplying?

Cardiovascular Anesthesia Reproductive Analgesia Ophthalmology

Phenylephrine Hydrochloride

Norepinephrine Bitartrate

Rocuronium Bromide

Lidocaine Hydrochloride

Oxytocin

Testosterone

Fentanyl Citrate

Hydromorphone

Hydrochloride

Bevacizumab

Moxifloxacin Hydrochloride

• Based on product data reported to the Agency

• Top 5 therapy areas comprise approximately 

70% of reported product volume

• Aligns with reported needs of customers that 

utilize higher volume of products
15

Challenges Faced by Customers

• Small volume products—less often supplied

• Not many outsourcing facilities specialize in 

dermatology products because they are 

typically nonsterile preparations
16

• Individual customers often utilize multiple 

outsourcing facilities to meet product needs

– Needs for high volume products outstrip the production 

capacity of an individual outsourcing facility

– No single outsourcing facility has a sufficiently broad 

product portfolio to provide all needed drugs

– Supply from outsourcing facilities can be inconsistent at 

times, necessitating “back up” to ensure constant supply

Challenges Faced by Customers
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• Lack of standardization of products between customers. Different 

hospitals/health systems/clinics have different preferred formulations 

of similar drugs compelling outsourcing facilities to tailor products to 

individual customers.

• Outsourcing facilities find it difficult to justify the production costs of 

specialty products (e.g., ophthalmics) due to small batch sizes

• Sensitive to supply chain disruptions for APIs, vials, and other supplies 

that can cause production inconsistencies.

• Continued “growing pains” regarding quality and CGMP compliance 

can cause disruptions in supply

Outsourcing Facility Challenges
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Summary

• Outsourcing facilities serve a broad range of diverse 

customers, each with specific needs

• Customers utilize outsourcing facilities to meet 

needs and fill gaps that cannot be served either 

internally or by commercial products

• While there is often a good match between 

customer need and outsourcing facility supply, 

both parties face challenges