Growing drug shortages have forced hospitals into a delicate dance that balances patient treatment against a dwindling drug stock.

Todd Blonshine addresses the problem with technology. His company, Mustard Tree Instruments, makes analytical devices employed at the beginning of the pharmaceutical supply chain. It’s a new approach based on a technology that’s more than 80 years old.

Research Triangle Park-based Mustard Tree has developed devices that analyze and verify pharmaceuticals. While improving quality control and fighting counterfeit drugs are obvious applications, Blonshine, the company’s founder and CEO, said the technology also addresses drug shortages. The majority of shortages are rooted in recalls and quality control issues. Instead of managing drug shortages at hospitals, Mustard Tree offers a way to address problems at manufacturing plants before drugs enter the supply chain.

“We want to know that every single pill coming off the line is good,” he said.

A Food and Drug Administration report on the recent spate of drug shortages found that quality problems at manufacturing sites accounted for 43 percent of all shortages making them the leading cause of shortages in the last year. Delays in manufacturing or shipping were cited as the next leading cause accounting for 15 percent of shortages. A short supply of active pharmaceutical ingredients accounted for only 10 percent of drug shortages.

Drug shortages are costly to patients and providers. Research from Premier, a Charlotte, N.C. based alliance more more than 2,500 U.S. hospitals and 78,000 other healthcare sites, found that even with generic equivalents available, drug shortages cost its members more than $78 million annually.

Mustard Tree’s products are based on Raman spectroscopy, a technology that uses lasers and readers to analyze the unique light signature of a chemical. Indian physicist C.V. Raman discovered the light scattering effect that now bears his name. But it took decades of technology advances to make technology employing Raman spectroscopy portable and affordable.

Blonshine has previous experience with Raman spectroscopy devices. At venture capital-backed Massachusetts company Ahura Scientific, Blonshine was part of a team that developed and commercialized a chemical analyzer employing Raman technology in a handheld device. Ahura was acquired by Thermo Fisher Scientific (NYSE:TMO) in early 2010 for $145 million. Blonshine left before the acquisition and founded Mustard Tree in 2009.

Privately-held Mustard Tree has eschewed venture capital. Blonshine said the fundraising environment remains challenging and venture capital firms aren’t investing on favorable terms. The company in July closed its first round of financing raising $4.8 million entirely from friends and family. To those individuals, Blonshine offered the chance for “venture-like returns” by investing part of their retirement savings in the company. More than 40 individual investors took Blonshine up on the offer.

Where Ahura focused on handheld instruments, Blonshine saw other opportunities to weave Raman technology into the manufacturing process. Pharma companies do have ways of testing pills for quality assurance but these methods end up consuming the product and it takes time to receive lab results. Such tests have typically been done at the end of the manufacturing process.

Because Mustard Tree’s technology analyzes light , the analyzers don’t consume the drugs being tested. Raman analysis is faster and it allows for testing of samples at the production line as part of the manufacturing process. The company is also developing an “in-line” analyzer that will be able to test every single pill coming through the manufacturing line.

Blonshine said Mustard Tree’s at-line instruments are in place with contract drug manufacturers and pharmaceutical companies but he declined to identify them citing non-disclosure agreements. Mustard Tree isn’t the only company addressing the problems of quality control and counterfeit medication. CertiRx, another RTP-based startup, is one of several companies that have developed tagging technologies to verify product down to the batch. But the anti-counterfeit companies have not taken Mustard Tree’s approach of marketing their technologies as drug shortage-fighting tools.

Right now, Mustard Tree products are only in place at manufacturing sites in North America. Blonshine said that the company will look to Europe next year, most likely with a larger partner. Mustard Tree has other instruments in its pipeline and the company will probably expand beyond pharmaceuticals. But Blonshine notes that the company hasn’t invented anything. Raman spectroscopy was discovered in the 1930s. Technology that made Mustard Tree’s products possible came with the same advances that made DVD players and digital cameras common, affordable products. Invention is high risk, Blonshine said. And as C.V. Raman’s discovery shows, the rewards of a technology’s invention may not come until years later.

“We want to innovate rather than invent,” Blonshine said.