LOWELLVILLE, Ohio – A business in a 120-year-old former bank building on East Water Street sends 60,000 doses of its product monthly to 45 states.
RC Outsourcing, started in 2015, is a pharmacy outsourcing operation, a special classification under the Federal Drug Administration. It’s one of 90 outsourcing companies across the country and one of three in Ohio.
“We mostly do eye injections, eye preparations, but we compound and put together drugs, from raw ingredients, to sell to clinics and hospitals and facilities, without physician prescriptions,” says owner Raymond Carlson, who is also a pharmacist.
He also owns RC Compounding in Poland, which operates more like a regular pharmacy. Carlson describes RC Outsourcing as something between a pharmacy and a manufacturer.
A typical manufacturer is an FDA-approved provider of commercially available drugs. If one of those manufacturers experiences a problem that affects the supply of one of the drugs it manufactures, the FDA will declare a shortage.
The FDA will put that drug on its short list, allowing outsourcing facilities to make it from raw materials while the shortage continues.
“We can act as a manufacturer in that regard,” Carlson explains.
The Operation
RC Outsourcing’s customers are clinics and medical providers, not individual patients.
“Down here, we can make hundreds and hundreds of doses, and clinics just call and say, ‘I need 200 of these, 100 of those,’” Carlson says.
Once the medication shortage is resolved, the FDA gives outsourcing businesses six months to stop making that drug.
“They use us when they need us, so to speak,” he says. “We certainly don’t compare ourselves with the typical manufacturer. But there is a nice niche for us to provide drugs to the community when it’s in short supply.”
The eye injections, used for treatment of macular degeneration, are repackaged by RC rather than its staff starting with the raw drug, mixing, sterilizing and compounding it.
Mike Basista, RC Outsourcing’s director of pharmacy, says that out of the 90 outsourcing facilities in the U.S., only four or five specialize in the injections that the Lowellville operation specializes in.
“For these eye injections, this little vial has four [milliliters] of drug in it,” Basista says. “So if you were the doctor and I was your patient and I had to get that injection, you would have to buy that vial for $800 and only use .05 ml.”
Outsourcing facilities are a cross between a regular pharmacy and a manufacturer. Basista says they can produce a different dosage for drugs that are available but not marketed. For the eye injections, for example, the drug comes in a 4 cubic centimeter vial, but RC Outsourcing makes it in single 0.05 ml dose vials.
“We’re allowed to dispense that or distribute that, but we act as a manufacturer in the case where we’re making it in bulk,” the director of pharmacy says. “We’re testing it. We have a quality department.”
Carlson says with the injections, RC Outsourcing repackages the drug.
“We are taking a vial of a drug that is very expensive, that is used for eye injections,” Carlson continues. “That may have 70 doses worth. It’s a drug that comes from an FDA-approved manufacturer and we are able to get and repackage small syringes that are sterile and are good for so many days. The physicians use them in their offices to give the patients an injection.”
RC’s cost is about $50 compared to about $1,600 per injection. That saves patients money, the owner says.
Carlson started another business, RC Compounding, a sterile compounding pharmacy in Poland, after working on pain pumps at Mercy Health and interacting with physicians.
“One night I came home and told my wife, ‘I can do this on my own,’ so I found a little part of the plaza there in Poland,” he recalls, adding that he eventually expanded into the whole building.
Outsourcing Origin
He added outsourcing to his services, opening in the former Lowellville Savings and Banking Co. building after Congress approved a law creating such businesses. That law followed a 2012 viral meningitis outbreak that was traced to contaminated steroid injections that had been distributed by a New England compounding pharmacy.
The law requires outsourcing to be housed in a separate building than a compounding pharmacy.
“I think the first year I was happy that we had gross sales of $50,000,” Carlson says.
That number is approaching $20 million and he says that shows the need.
Justin Romeo, company CFO, started working at RC Outsourcing in 2016. Since that time, he’s seen the number of monthly invoices he sends increase from about 30 to more than 300.
“It’s really impressive to see the growth that we’ve had – our milestones,” Romeo says. “That first time that we crossed over the 10,000 syringe mark, and then the 20,000 syringe. Seeing that growth has always just amazed me because I got to see it maybe not from day one, but it was close to it, so it’s kind of like my baby in that sense. And it’s home for us. We’re here 40 hours a week, but we have a very close knit group here, so it is a joy to come to work.”
RC Outsourcing’s latest numbers hit 60,000 syringes shipped each month.
Basista, a village native and resident, believes the company is a community benefit. Physicians from other states contact the business and learn more about the town.
“It puts us on the map,” he says. “And from someone coming from this town, we’re very small, right? I’m not lying, our footprint is much bigger than what people think, in my opinion.”
Federal Requirements
Besides meeting FDA requirements, RC is also governed by the pharmacy board in each state where its products are shipped and it secures licensing accordingly. Basista also must meet the licensing criteria based on the requirements of each state.
Basista and Kim Beight, director of quality assurance, lead the company in ensuring policies and procedures are in place to follow FDA requirements. They also make sure everyone at the business adheres to those policies and procedures.
Carlson says he’d put their knowledge and expertise up against anybody’s.
“Pretty much everything that we do has a process, a procedure, a step by step kind of way of doing things,” Beight explains.
It can be time consuming but they understand the importance, she says.
“And can I add that the only way to do that is to understand the law and understand the guidances that FDA sends out and publishes,” Carlson explains. “You have to know what the FDA wants you to do, and I would say that a lot of their time is spent just knowing what the rules are. You have to understand the rules of the game and what the FDA wants …”
FDA investigators regularly inspect the operations in unannounced visits, checking every aspect of the business. If the inspectors find anything they determine must be addressed, RC Outsourcing personnel must answer them. Carlson says that’s a long and involved process. And the federal government changes its guidance and requirements so both Basista and Beight’s jobs are ever-evolving.
“You think you’ve got something down and then something changes and you’ve got to rewrite your policy,” Beight says. “You have to buy a new piece of equipment. You have to train to do something different, so there’s a lot. It’s an ongoing process.”
The former bank building spans about 4,500 square feet and includes an anteroom, a clean room, shipping area and office space for about 20 employees. Carlson renovated the building, which housed several different banks after the original. He retained the vault, restoring its original appearance. And it still works. The bank building was the first of several historic buildings in the village that Carlson bought and renovated.
He may expand the building at some point, but for now, believes it’s the right sized operation.
“We don’t want to grow to where it just gets too chaotic,” he says. “We’re kind of happy where we are. … For the most part, we are maxing out in terms of where we want to be and how big we want to be.”
Pictured at top: Ray Carlson, owner of RC Outsourcing, stands with Kim Beight, director of quality assurance; CFO Justin Romeo; Carey Silvestry, who is in charge of client relations; and Mike Basista, director of pharmacy, inside the outsourcing pharmacy.
