Drug Compounding And Its Effects On Pharmaceutical Compounding

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The Company

Fagron is a Netherlands-based company (although its registered office and listing is in Belgium) focused on pharmaceutical compounding. The company has undergone a significant restructuring over the past few years, divesting a number of medical/dental businesses (with the last one done in March), to reshape itself into a global drug compounding leader. Drug compounding is essentially taking a drug ingredient (e.g. a painkiller) and preparing it in a form different from the usual pill form (e.g. a topical cream). Such compounds are useful if a patient is unable to take the traditional form (e.g. a patient that is addicted to a painkiller would benefit from a topical application, or a patient that can’t open her jaw to swallow a pill would benefit from a drug in solution she could drink through a straw).

Drug Compounding
Drug compounding is a big business around the world—and in fact in Brazil where Fagron has a significant amount of sales, a large percentage of all drugs are actually compounded by a pharmacist rather than being made in pill form. Part of the reason for that is that these are generic drugs whose ingredients are cheap and pharmacists don’t charge a lot to make the drug. In Brazil a prescription would cost $15-20 whether it was compounded or not. In addition a lot of the compounded drugs taken in Brazil are OTC type items like vitamins or diet supplements.
In the US however, despite many of the ingredients being very cheap, the difference
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