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The indirect costs of risk management for hospital insourcing

This post is our third in a series of blogs looking at how hospitals make the difficult decision to compound their own drugs versus selecting an outsourcing partner. The decision involves a great deal more than a clean room and a vial of medication.  

A wide range of indirect costs are specifically related to risk management when compounding pharmaceuticals in-house. Any deviation in these areas can result in legal expenses, reputational harm and, most importantly, potential danger to the patients that trust you.

These variables include:

  • Facility and equipment maintenance
  • Recruitment and management
  • Staff training consistency
  • Medical errors
  • Other quality control efforts

Facility & Equipment Maintenance must be monitored in an effort to meet dynamic regulations. There is an increasing trend in the number of citations and recommendations made to hospital compounding facilities. It is critical that hospitals make internal improvements and invest in facilities, equipment, processes, and training.[1]

Maintenance of clean rooms not only requires upkeep and cleaning of equipment but training staff on proper procedures as well.

Staff Recruitment, Management and Training is another key factor to consider.

Hospital pharmacy personnel must have the knowledge and ongoing, updated training to compound potentially thousands of both simple and complex preparations and products. In addition, quality assurance programs and policies & procedures must be in place so that regularly scheduled required audits can be conducted.                   

Health care facilities must set forth expectations and guidance on hiring, training, testing, and retesting staff; each places an added burden on staff members who are responsible for oversight, and budget.[2]

Medical Errors

Medical errors in compounding or dispensing are another concern for hospitals that in-source. Over the past five years, 23% of facilities that insource have experienced a patient incident involving a compounding error, and that percentage increases with the size of the facility.[3]

While errors are made by individuals, the blame has shifted, with prevailing belief that medication errors of any kind are a systemic problem – the result of a larger failed system. Hospitals must develop strategies for education and prevention designed to introduce barriers and safeguards at every level so that a mistake can be caught and prevented before the medication is dispensed. These efforts cost healthcare facilities billions of dollars nationwide and contribute significantly to an ever-growing stream of costs for hospitals of all sizes.[4]

Other Quality Control Efforts

Quality control is a constant concern for hospitals, especially if they are compounding in-house. From ensuring the facilities meet rigid standards, to managing the multiple steps in preparing compounded drugs, controlling the quality of the end product is a complex process and challenge. Studies have shown that the traditional manual IV compounding process has an average error rate of 9%, not surprising when considering the complexity of the process.

Additionally, hospitals throughout healthcare are choosing to invest in solutions and technologies that can help sharply reduce or even eliminate the most common mistakes that still plague the IV preparation process.[5]


At SCA Pharma, we are confident knowing that our products and services provide our customers with more than critical medicines.  We provide assurance that you are delivering conforming products that have passed all end product testing requirements and have been compounded according to cGMP standards by a staff that is continually trained and evaluated.

Pull quote at end:

“What we do matters…makes a real difference. We delivery critical products that save lives so that our customers can focus on the care of patients.”

-SCA Pharma CEO Milton Boyer

Related stories from SCA Pharma:

Thinking of compounding in-house? Don’t forget to calculate these three “hidden” costs.

Insourcing versus Outsourcing – the indirect costs of insourcing






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