Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I spent a little time on the show yesterday talking
about the FDA's new ruling that there is no longer
a shortage of the key ingredients in the GLP one drugs,
which are designed as diabetes drugs but have turned into
this kind of magic weight loss pill or magic weight
(00:21):
loss shot, and the FDA is now saying there isn't
a shortage there anymore. So these compounding pharmacies that have
been making these drugs in order to keep up with demand,
because the manufacturers of the patented drugs haven't been able
to keep up with demand, that there's no longer shortage
to the compounders are not going to be allowed to
(00:41):
do this anymore. And a friend of mine named Greg
actually is a regional director for a broker in the
compounding industry. And I'm not going to use Greg's last name,
and I'm not going to use the name of the
company that he worked for, but Greg texted me to
(01:02):
say yesterday to say, you know, Ross, probably a lot
of these companies are still going to keep making these
drugs and I and I said, how is that possible?
And I said, wait, let's talk about it on the year.
And so Greg joins us. Now, Hey, Greg, welcome to
Koa SA. How you doing. I'm doing really well, especially
with that glossop news that you just heard me talking about.
(01:22):
But before we get into the details of what you
said yesterday, I just want to back out into a
slightly higher level conversation. Can you please explain to us
what the compounding industry is.
Speaker 2 (01:35):
The compounding industry is typically an FDA approved facility pharmacy
inspected by the FDA, and what they do is they
make specific medications that are specific to a patient themselves.
For instance, I've worked in compounding for about twelve years,
and I started in the topical compounding side of things,
(01:58):
where you might be familiar with the Voltairean Jail will
Vultaian Jail was, I believe three percent by clothin act. Well,
compounding pharmacies were doing three percent of clothin act in
a different base or vehicle, and they would add something
like a product called backwifin at two percent, and that
(02:18):
could get around the patent that Voltaian Jail would have.
So I'm not saying the compounding pharmacies exists to get
around these patents. I'm saying that there I believe are
loopholes in the law that allows them to compound certain
products for patients that are specific for patients' needs, And is.
Speaker 1 (02:41):
The motivation to use a compounding pharmacy. I mean, there's
probably a few, but I just want to talk about
them a little bit. So one could be you really
need a particular pharmaceutical tailored in a way that's just
for you, and what you would normally buy of the
patented medication, let's say, isn't quite right for you, and
you really need this thing tailored for you that one.
Another one could be there's a shortage of the patented
(03:03):
one and I just need this stuff, so you guys
make it for me because otherwise I can't get it.
A third one might be cost right. Maybe the patented
thing is a thousand bucks a month and the compounded
thing is three hundred dollars a month. So which of
those are most important in your industry?
Speaker 2 (03:19):
I think the most important is specificity to the patient's
needs and reduction of cost. You know. Another another for
my for my business specifically, we only charge cash or
compuny pharmacies have gotten a bad rap in the past,
uh is they were billing insurance companies thousands of dollars
(03:43):
for products that you know, we charge casts. My company
charges casts were right now for a much much less
product or much less of a price, I would say,
but the same high quality that was dispensed before it
was essentially is fleecing. I would consider fleecing of the
(04:03):
insurance companies kind of like I think right.
Speaker 1 (04:07):
Now brands with the patents, Is that what you're saying.
Speaker 2 (04:11):
No, the compounders wouldn't be the big brands with the patents,
but they would be. At one point, insurance companies would
use compounding pharmacies and they were getting charged thousands and
thousands of dollars by these compounding pharmacies, and the insurance
companies themselves were reimbursing these uh, these companies. But that
(04:33):
that basically came to an end I'd say about twelve
years ago, where insurance companies got why to what was
going on. They were seeing the monies that were going
out in reimbursements and they just cut off. They cut
off that sticket. Now, as it relates to the g
LP one, you're right, there was a shortage, but the
shortage was with the dispensers, the pens. The pens made
(04:55):
in China, and so I mean, obviously, if compounders are
able to make these products, there isn't a shortage of
the drug itself. There is there was just what I
was told her. I think I read somewhere in the
passes there was just a shortage of the vehicles the applicators,
and they weren't able to keep up with the man
(05:17):
of the applicators themselves. And apparently that logs in is
kind of letting up.
Speaker 1 (05:22):
And I don't know, you could be right, but everything
I've read said there was a shortage of a of
a key ingredient and Novo Nordis couldn't make enough of it,
and the compounders could somehow make it make it themselves.
I didn't hear anything about a shortage of these, you know,
sort of injection ten kind of things, because if there
was a shortage of those, I don't know how the
(05:43):
compounders would get them if the big guys couldn't.
Speaker 2 (05:47):
Well, compounders aren't using the injection pens, but they're using
our needles and syringes for the GLP ones. So if
a bile, the patient will draw up their medication ya
neil and syringe out of the vile. Interesting whereas the
pen applicators actually come with the drug inside, and then
(06:07):
I think they're there. They twisted to a certain setting
that releases a certain amount of drug, they inject themselves,
and they continue to do that for the duration of
medication within the pen.
Speaker 1 (06:18):
All right, we're we're talking with my friend Greg, who's
a regional director for a broker in the compounding industry.
So let's get directly to what I was talking about.
And you were texting me about yesterday. So I really
know very very little about this industry. So I you know,
I read in an article that the FDA is going
to tell the compounders that the shortage is over and
(06:39):
you can't make it or sell the stuff anymore. And
you texted me to say that you think they still will, uh,
and that they'll find a way around it, and you
touched on it a little bit, but you know, can
you can you talk about this a little more, like
how how confident are you that compounders are going to
keep making you know, a copycat And I don't mean
(07:00):
that as a as a pejorative, but a copycad of
let's say ozempic or will GOVI or something and potentially
selling it for much less. I mean, isn't isn't the
purpose of patents to prevent that?
Speaker 2 (07:14):
I would agree with you that the purpose of patents
is to prevent something like that. However, I think the
pharmaceutical companies kind of put themselves behind the eight ball.
I mean, you currently have fifteen million Americans using GLP ones,
and of those fifteen million Americans that are using them
for wave offs or probably getting them from either their
(07:34):
position via a compounding pharmacy or to some sort of
a met spa or what have you. I mean, you've
got other companies that everybody sees commercials for on TV
where you can get these things. But what is going
to what I can tell you what art suppliers are
telling us. They're telling us business as usual, and they
(07:57):
will litigate it in court. Now mentioned copy. Here's here's
the difference, or what I think is the loophole within
the law, which is a Federal Food Drug and Cosmetic
Act fdncac F. The yeah fd ANDA is when you
compound these medications, you can't do an exact copy. But
(08:21):
what a lot of compounders have been doing is they've
been adding other ingredients to the medication, such as B
twelve or B six or something like niosin that gets
around the copy pattern. Then they use different and they
use different applicators themselves. They're not using the actual applicators,
(08:44):
which should also I think fall on the copy infringement.
If you're using the needles and syringes, you're using B twelve,
B six or even niosin. That is I believe the loophole.
Now I'm not an attorney. Yeah, my wife has actually
taken the bar today to become one good for her,
(09:08):
thank you.
Speaker 1 (09:08):
I know Greg's wife, and she's way smarter and better
looking than he is. So yeah, you're definitely uh punching
above your weight class when you when you got her
a really good job. Uh so let's stick with this.
I got I got about a minute left. What what
I wonder then, given given what you said, is why
(09:29):
wouldn't compounders make much less expensive but still high profit
margin for them versions of of every expensive of every
expensive drug and just take that patented chemical whatever it is,
and add vitamin B twelve to it and call it
a day. I mean, I I can't imagine how these
massive pharmaceutical companies with billions of dollars in the bank
(09:53):
would not sue the compounders into oblivion for that.
Speaker 2 (09:57):
Well, I'm not saying that this isn't going to happen,
but I can tell you that some of the compounding
pharmacies are making bookoo bucks off of this. Yeah, and
for them it's certainly worth it to fight this out
in court. Now, if this gets in the litigation, we
know how long litigation can take. So now, I mean,
(10:19):
as I stated before, anything can happen with the law.
We shoot this all the time. But as of right now,
my suppliers are suppliers, are partners. They are telling us
business as usual.
Speaker 1 (10:32):
Wow.
Speaker 2 (10:33):
Now, when I was reading a news article on Hymns
and Hers this this morning by Ruter through Reuters that
said that they're talking about pulling there's some magnotypes or
emportize off the market, and that could be because I
think they use the actual applicators. Yeah, and they're copying
the dose as well.
Speaker 1 (10:53):
Right, And that company stock has gotten destroyed on this
news and then destroyed again today on earnings news and
the stock's down like close to fifty percent, I think,
And I don't have a position in it. I don't
care one way or another, but it's definitely interesting. And
just last quick follow up, you know, Greg just said, well,
there's so much money to be made making these glp ones,
(11:14):
is compounding pharmacies and selling them for you know, prices
that are much less than you pay for ozempic, but
still a huge profit margin for the compounder that they
may well just try to keep making it and say,
take us to court. And then I think the risk there, Greg,
will be if a court says, you know, the patented
(11:34):
the patented drug companies are so likely to win that
I'm going to issue an injunction right now that forces
all the compounders to stop because they're so likely to lose.
And so their argument that well, it'll probably take years
to make its way through court and in that time
will make millions and millions of dollars. A court might
stop them. Again, you're not an attorney, and you're not
(11:56):
you're not really representing them, you're just telling us the story.
But I think that's what could play out. I'll give
you the last seventeen seconds.
Speaker 2 (12:04):
If you're a patient taking these things, my suggestion is
just continue to do what you're doing without fear and
just wait for the mark.
Speaker 1 (12:13):
To play out. Greg is regional director for a broker
in the compounding industry. Fascinating conversation, Greg, thanks for your time.
Speaker 2 (12:21):
Thank you, Ros. Take care.
I spent a little time on the show yesterday talking
about the FDA's new ruling that there is no longer
a shortage of the key ingredients in the GLP one drugs,
which are designed as diabetes drugs but have turned into
this kind of magic weight loss pill or magic weight
(00:21):
loss shot, and the FDA is now saying there isn't
a shortage there anymore. So these compounding pharmacies that have
been making these drugs in order to keep up with demand,
because the manufacturers of the patented drugs haven't been able
to keep up with demand, that there's no longer shortage
to the compounders are not going to be allowed to
(00:41):
do this anymore. And a friend of mine named Greg
actually is a regional director for a broker in the
compounding industry. And I'm not going to use Greg's last name,
and I'm not going to use the name of the
company that he worked for, but Greg texted me to
(01:02):
say yesterday to say, you know, Ross, probably a lot
of these companies are still going to keep making these
drugs and I and I said, how is that possible?
And I said, wait, let's talk about it on the year.
And so Greg joins us. Now, Hey, Greg, welcome to
Koa SA. How you doing. I'm doing really well, especially
with that glossop news that you just heard me talking about.
(01:22):
But before we get into the details of what you
said yesterday, I just want to back out into a
slightly higher level conversation. Can you please explain to us
what the compounding industry is.
Speaker 2 (01:35):
The compounding industry is typically an FDA approved facility pharmacy
inspected by the FDA, and what they do is they
make specific medications that are specific to a patient themselves.
For instance, I've worked in compounding for about twelve years,
and I started in the topical compounding side of things,
(01:58):
where you might be familiar with the Voltairean Jail will
Vultaian Jail was, I believe three percent by clothin act. Well,
compounding pharmacies were doing three percent of clothin act in
a different base or vehicle, and they would add something
like a product called backwifin at two percent, and that
(02:18):
could get around the patent that Voltaian Jail would have.
So I'm not saying the compounding pharmacies exists to get
around these patents. I'm saying that there I believe are
loopholes in the law that allows them to compound certain
products for patients that are specific for patients' needs, And is.
Speaker 1 (02:41):
The motivation to use a compounding pharmacy. I mean, there's
probably a few, but I just want to talk about
them a little bit. So one could be you really
need a particular pharmaceutical tailored in a way that's just
for you, and what you would normally buy of the
patented medication, let's say, isn't quite right for you, and
you really need this thing tailored for you that one.
Another one could be there's a shortage of the patented
(03:03):
one and I just need this stuff, so you guys
make it for me because otherwise I can't get it.
A third one might be cost right. Maybe the patented
thing is a thousand bucks a month and the compounded
thing is three hundred dollars a month. So which of
those are most important in your industry?
Speaker 2 (03:19):
I think the most important is specificity to the patient's
needs and reduction of cost. You know. Another another for
my for my business specifically, we only charge cash or
compuny pharmacies have gotten a bad rap in the past,
uh is they were billing insurance companies thousands of dollars
(03:43):
for products that you know, we charge casts. My company
charges casts were right now for a much much less
product or much less of a price, I would say,
but the same high quality that was dispensed before it
was essentially is fleecing. I would consider fleecing of the
(04:03):
insurance companies kind of like I think right.
Speaker 1 (04:07):
Now brands with the patents, Is that what you're saying.
Speaker 2 (04:11):
No, the compounders wouldn't be the big brands with the patents,
but they would be. At one point, insurance companies would
use compounding pharmacies and they were getting charged thousands and
thousands of dollars by these compounding pharmacies, and the insurance
companies themselves were reimbursing these uh, these companies. But that
(04:33):
that basically came to an end I'd say about twelve
years ago, where insurance companies got why to what was
going on. They were seeing the monies that were going
out in reimbursements and they just cut off. They cut
off that sticket. Now, as it relates to the g
LP one, you're right, there was a shortage, but the
shortage was with the dispensers, the pens. The pens made
(04:55):
in China, and so I mean, obviously, if compounders are
able to make these products, there isn't a shortage of
the drug itself. There is there was just what I
was told her. I think I read somewhere in the
passes there was just a shortage of the vehicles the applicators,
and they weren't able to keep up with the man
(05:17):
of the applicators themselves. And apparently that logs in is
kind of letting up.
Speaker 1 (05:22):
And I don't know, you could be right, but everything
I've read said there was a shortage of a of
a key ingredient and Novo Nordis couldn't make enough of it,
and the compounders could somehow make it make it themselves.
I didn't hear anything about a shortage of these, you know,
sort of injection ten kind of things, because if there
was a shortage of those, I don't know how the
(05:43):
compounders would get them if the big guys couldn't.
Speaker 2 (05:47):
Well, compounders aren't using the injection pens, but they're using
our needles and syringes for the GLP ones. So if
a bile, the patient will draw up their medication ya
neil and syringe out of the vile. Interesting whereas the
pen applicators actually come with the drug inside, and then
(06:07):
I think they're there. They twisted to a certain setting
that releases a certain amount of drug, they inject themselves,
and they continue to do that for the duration of
medication within the pen.
Speaker 1 (06:18):
All right, we're we're talking with my friend Greg, who's
a regional director for a broker in the compounding industry.
So let's get directly to what I was talking about.
And you were texting me about yesterday. So I really
know very very little about this industry. So I you know,
I read in an article that the FDA is going
to tell the compounders that the shortage is over and
(06:39):
you can't make it or sell the stuff anymore. And
you texted me to say that you think they still will, uh,
and that they'll find a way around it, and you
touched on it a little bit, but you know, can
you can you talk about this a little more, like
how how confident are you that compounders are going to
keep making you know, a copycat And I don't mean
(07:00):
that as a as a pejorative, but a copycad of
let's say ozempic or will GOVI or something and potentially
selling it for much less. I mean, isn't isn't the
purpose of patents to prevent that?
Speaker 2 (07:14):
I would agree with you that the purpose of patents
is to prevent something like that. However, I think the
pharmaceutical companies kind of put themselves behind the eight ball.
I mean, you currently have fifteen million Americans using GLP ones,
and of those fifteen million Americans that are using them
for wave offs or probably getting them from either their
(07:34):
position via a compounding pharmacy or to some sort of
a met spa or what have you. I mean, you've
got other companies that everybody sees commercials for on TV
where you can get these things. But what is going
to what I can tell you what art suppliers are
telling us. They're telling us business as usual, and they
(07:57):
will litigate it in court. Now mentioned copy. Here's here's
the difference, or what I think is the loophole within
the law, which is a Federal Food Drug and Cosmetic
Act fdncac F. The yeah fd ANDA is when you
compound these medications, you can't do an exact copy. But
(08:21):
what a lot of compounders have been doing is they've
been adding other ingredients to the medication, such as B
twelve or B six or something like niosin that gets
around the copy pattern. Then they use different and they
use different applicators themselves. They're not using the actual applicators,
(08:44):
which should also I think fall on the copy infringement.
If you're using the needles and syringes, you're using B twelve,
B six or even niosin. That is I believe the loophole.
Now I'm not an attorney. Yeah, my wife has actually
taken the bar today to become one good for her,
(09:08):
thank you.
Speaker 1 (09:08):
I know Greg's wife, and she's way smarter and better
looking than he is. So yeah, you're definitely uh punching
above your weight class when you when you got her
a really good job. Uh so let's stick with this.
I got I got about a minute left. What what
I wonder then, given given what you said, is why
(09:29):
wouldn't compounders make much less expensive but still high profit
margin for them versions of of every expensive of every
expensive drug and just take that patented chemical whatever it is,
and add vitamin B twelve to it and call it
a day. I mean, I I can't imagine how these
massive pharmaceutical companies with billions of dollars in the bank
(09:53):
would not sue the compounders into oblivion for that.
Speaker 2 (09:57):
Well, I'm not saying that this isn't going to happen,
but I can tell you that some of the compounding
pharmacies are making bookoo bucks off of this. Yeah, and
for them it's certainly worth it to fight this out
in court. Now, if this gets in the litigation, we
know how long litigation can take. So now, I mean,
(10:19):
as I stated before, anything can happen with the law.
We shoot this all the time. But as of right now,
my suppliers are suppliers, are partners. They are telling us
business as usual.
Speaker 1 (10:32):
Wow.
Speaker 2 (10:33):
Now, when I was reading a news article on Hymns
and Hers this this morning by Ruter through Reuters that
said that they're talking about pulling there's some magnotypes or
emportize off the market, and that could be because I
think they use the actual applicators. Yeah, and they're copying
the dose as well.
Speaker 1 (10:53):
Right, And that company stock has gotten destroyed on this
news and then destroyed again today on earnings news and
the stock's down like close to fifty percent, I think,
And I don't have a position in it. I don't
care one way or another, but it's definitely interesting. And
just last quick follow up, you know, Greg just said, well,
there's so much money to be made making these glp ones,
(11:14):
is compounding pharmacies and selling them for you know, prices
that are much less than you pay for ozempic, but
still a huge profit margin for the compounder that they
may well just try to keep making it and say,
take us to court. And then I think the risk there, Greg,
will be if a court says, you know, the patented
(11:34):
the patented drug companies are so likely to win that
I'm going to issue an injunction right now that forces
all the compounders to stop because they're so likely to lose.
And so their argument that well, it'll probably take years
to make its way through court and in that time
will make millions and millions of dollars. A court might
stop them. Again, you're not an attorney, and you're not
(11:56):
you're not really representing them, you're just telling us the story.
But I think that's what could play out. I'll give
you the last seventeen seconds.
Speaker 2 (12:04):
If you're a patient taking these things, my suggestion is
just continue to do what you're doing without fear and
just wait for the mark.
Speaker 1 (12:13):
To play out. Greg is regional director for a broker
in the compounding industry. Fascinating conversation, Greg, thanks for your time.
Speaker 2 (12:21):
Thank you, Ros. Take care.
The Ross Kaminsky Show News
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