June 2, 2020
\nVolume 44, Issue 6
\nPage Number: 38\u201340
\nBy Felicity Thomas, Pharmaceutical Technology<\/p>\n
The global population is aging, the prevalence of chronic conditions is rising, and medicines are becoming more widely accessible globally, which are all leading to greater demand and growth in pharmaceuticals and pharmaceutical ingredients. According to market research, the API market is expected to experience a compound annual growth rate of 6.7% in the forecast period of 2020\u20132027<\/p>\n
Production of pharmaceutical ingredients has gradually shifted over the course of several decades to Asia, rather than Western-based countries, which has been driven largely by cost savings. This global access to supply has been largely beneficial to the industry and patients alike, expanding access to medicines for many more people around the world.<\/p>\n
\u201cBeginning in the 1980s, the pharmaceutical industry experienced a gradual shift in the manufacturing of some APIs and finished drug products from Western-based countries to China and India. This transition not only better served growing regional demand across Asia for high-quality healthcare products, but helped to reduce drug manufacturing costs,\u201d confirms Dr. Andreas Meudt, vice-president of exclusive synthesis for the Health Care business line of Evonik. \u201cThe low-cost benefits of manufacturing APIs and drug products within Asia has helped to turbocharge the generic drug industry and expand global access to a range of lower-cost medication options,\u201d says\u00a0Meudt.<\/p>\n
One of the most obvious changes to the pharmaceutical manufacturing supply chain has been the increased reliance on external partners for the development and commercialization of products, notes Lonnie Barish, vice-president, business development and marketing, Bora Pharmaceuticals. \u201cThe shift has been positive for patients, allowing consumers to benefit from lower cost drugs from US Food and Drug Administration (FDA) and European Union (EU) inspected current good manufacturing practice (cGMP) facilities while still maintaining quality, innovation, and allowing efficient drug development and commercialization routes,\u201d he\u00a0says.<\/p>\n
\u201cCompanies have been engaging offshore, international manufacturing partners for several reasons. The initial drivers have been accessing lower cost supplies and proximity to emerging markets,\u201d Barish continues. \u201cWhile managing costs has been a central theme, access to capacity, technical capabilities, and cutting-edge science at high quality CGMP facilities have also prompted many offshore partnerships, especially for more commoditized and high-volume products.\u201d<\/p>\n
Through the purchase of former \u2018Big Pharma\u2019 facilities, many offshore contract development and manufacturing organizations (CDMOs) are now capable of offering high levels of product quality, Barish stresses. \u201cHowever, the nature of pharma is increasingly global, and whether offshore or not, CDMOs must compete internationally on a number of challenging fronts,\u201d he adds. \u201cIf a supplier can offer flexible scale and capacity, efficient processes, and specific technologies and capabilities all designed to optimize manufacture of a drug product, then that CDMO is already providing distinct advantages.\u201d<\/p>\n
In addition to the move to offshore manufacturers, companies have also been outsourcing more complex APIs and drug products to specialized contract manufacturing organizations (CMOs) and CDMOs. \u201cOne reason for this change is that an increasing number of APIs are highly complex, with many requiring more than a dozen steps for synthesis. Most require a range of advanced technologies that go far beyond the realms of classical chemistry,\u201d explains Meudt. \u201cIn many cases, there are only a few CMOs in the world that have the necessary core competencies to manufacture such complex APIs. These CMOs tend to have a Western-centred global manufacturing network. In addition to these CMO sites providing proximity to core regional healthcare markets, pharmaceutical companies also benefit from the reliability of these CMO partners when it comes to quality consistency, supply security, and intellectual property protection.\u201d<\/p>\n
However, in the advent of a global pandemic, such as that of COVID\u00e2\u0080\u009119, potential vulnerabilities in the current pharmaceutical supply chain have been highlighted (2). In a position paper from the European Fine Chemicals Group (EFCG), concerns on the potential threat of medicines shortages as a result of the dependency on Asian countries for APIs, which is stated as being close to 80% for EU medicinal products, were laid out (3). A possible three-part solution to preventing drugs shortages in the future was specified in the paper, including a plan to \u201cbring critical off-shore technology back to Europe\u201d (3).<\/p>\n
Even in cases of less complex APIs, and with some products being considered essential to the provision of patient care, a shift in strategy is being seen across the industry, asserts Meudt. \u201cRather than seeking short-term, price-sensitive supply contracts with a range of CMOs, many companies are instead prioritizing long-term supply relationships with a short-list of preferred CMOs,\u201d he says. \u201cWhile manufacturing cost will always be important, pharmaceutical companies are increasingly selecting their long-term CMOs based upon other factors including security of quality and supply, regulatory track record, data control, and environmental sustainability. Regardless of geography or price, customers want CMOs that can deliver long-term value and peace-of-mind.\u201d<\/p>\n
COVID-19 has elevated the issue of API and drug product supply further to industry and governmental bodies, Meudt continues. \u201cHealthcare systems are coming to recognize that domestic or regional access to API manufacturing, together with national safety stocks for essential medicines, must be a strategic imperative to maintain continuity of supply during future pandemics or other globally disruptive events,\u201d he\u00a0says.<\/p>\n
India and China are currently in a strong position as many of the necessary raw materials that are required to manufacture certain APIs are only available in those regions. \u201cHowever, it is becoming increasingly apparent to many European and North American leaders that they must re-evaluate their regional API, intermediate, and drug manufacturing capabilities to further reduce the risk of critical supply chain breakdowns occurring in the future,\u201d Meudt asserts. \u201cClose interaction between pharmaceutical companies, CMOs (such as Evonik), industry groups, and governments will be required to ensure that the regional supply of APIs to local healthcare systems can be better maintained even during periods of global crisis.\u201d<\/p>\n
\u201cThe current COVID-19 pandemic has re-focused the spotlight on the preparedness and resiliency of pharma\u2019s contract manufacturing and API supply chains. Offshore or domestic suppliers are going to have to redouble their efforts to assure reliability, redundancy, and quality,\u201d emphasizes Barish. \u201cGoing forward, I think there will be significant pressure on pharmaceutical companies to strengthen their own supply lines, obtaining secondary sites, and additional partners.\u201d<\/p>\n
Furthermore, increasing regulatory scrutiny is another factor affecting outsourcing decisions by pharmaceutical companies. \u201cThe ability of a CMO to prevent product contamination, avoid occupational exposure to highly potent APIs, minimize emissions, and maintain the integrity of pharmaceutical manufacturing data are all growing areas of scrutiny,\u201d Meudt confirms.<\/p>\n
Typically, a pharmaceutical company will employ one of two potential strategies to transfer manufacturing activities from one region to another, explains Meudt. \u201cFor APIs used with already commercial products, companies will undertake a multi-year process to shift at least some portion of the manufacturing to an alternative local CMO,\u201d he says. \u201cAlthough, it is more common that companies simply revise their manufacturing strategy for pipeline drug products before they reach late-stage clinical trials and commercial approval. Either way, the company will typically have a shortlist of prospective CMO candidates within a local region that have the necessary competencies, capacity, and regulatory track record.\u201d<\/p>\n
Transference of API manufacturing from a CMO in one site to another in a different region can aid in the improvement of supply continuity, but Meudt stresses that this sort of change should only be done with a CMO that can demonstrate a track record in areas, such as capacity expansion, process and equipment harmonization, and quality management, so that any potential risks are minimized. \u201cIt can further help to reduce supply chain risk if the CMO is either backward integrated in the production of some of the associated raw materials required to manufacture the API or has experience in the qualification of other prospective suppliers,\u201d he adds.<\/p>\n
It can take several years for a company to transfer manufacturing from one region to another, typically between three to five years, notes Meudt. During the transition period, companies must perform the review and selection process for a new CMO partner, complete audits and technical transfer, as well as implement the processes to support scale-up to the required clinical or commercial volumes. \u201cAround two years are also required to complete the regulatory approval process,\u201d Meudt says. \u201cWhile the COVID-19 situation may incentivize companies and governments to try and accelerate such transfers, it is of critical importance that key process steps are maintained to the highest quality and regulatory standards. Qualified teams with technical experience in the technical transfer process for such APIs and drug products are important.\u201d<\/p>\n
As the current global pandemic has made clear the critical issue of API and drug product manufacturing, there have been concerns raised by industry officials globally about the potential risks of losing access to essential medicines. \u201cComments from officials within several governments worldwide indicate that countries could in future choose to prioritize the supply of locally manufactured APIs and drug products for use within their own healthcare systems,\u201d states Meudt. \u201cFortunately, the global pharmaceutical supply chain appears to have held up well to-date due to normal stockpiling strategies and the continued operation of core manufacturing and logistical activities.\u201d<\/p>\n
Given the fact that the pharmaceutical supply chain is a global and highly complex system, Meudt iterates that the current status quo of ingredients manufacturing will largely stay the same. \u201cPharmaceutical manufacturing capacities will continue to expand across North America, Europe, China, India, and other markets to meet the growing healthcare demands of local populations,\u201d he notes. \u201cIn parallel, CMOs within each country or region will continue to specialize in their respective areas of core competence.\u201d<\/p>\n
Agreeing, Barish adds that there will inevitably be a place for both onshore and offshore manufacturing simply due to the global nature of the pharma industry. \u201cThere will always be some products, controlled substances for example, that cannot be produced in certain facilities in a specific market,\u201d he says. \u201cOther reasons, such as drug strategy and cost will have an impact as to where manufacturing takes place. A novel drug with a smaller batch size, for example, may not be suited to offshore manufacture as the economies of scale will not be beneficial.\u201d<\/p>\n
Asia is expected to continue to be a primary source for the world\u2019s generic APIs and drug products; however, Meudt specifies that there are also expectations that some companies, with a strong manufacturing presence in Asia, may seek to further reduce short-to-medium term supply chain risk by having a larger percentage of their total global production requirements either made, or stockpiled, in Europe or the United States. \u201cFor new complex APIs or highly specialized drug products, it is expected that most production will continue to occur at established sites that have the right capabilities, quality culture, and record for project execution,\u201d he adds. \u201cThis shift not only reflects the need to reduce regulatory risk and improve proximity to key healthcare markets, but the advanced technologies and precise processes that CMOs need to possess to successfully commercialize such APIs and finished drug products at desired levels of quality.\u201d<\/p>\n
Simultaneously, Meudt predicts that regional and national governments will further encourage companies to increase the manufacture of essential APIs and drug products at local sites to ensure preparedness in any future pandemics. \u201cIt is likely that many governments will review what financial incentives can be put forward to accelerate investment by pharmaceutical companies and CMOs to further strengthen regional capacities,\u201d he says.<\/p>\n
\u201cAs we move into a post-COVID-19 world, managing supply chain risk must become integral to business planning, risk management, and long-term drug strategy,\u201d summarizes Barish. \u201cIt is therefore important to engage with partners that offer logistical advantages, whether they be domestic or offshore, and can contribute to the security and reliability of the drug supply.\u201d<\/p>\n
1. Grand View Research, \u201cActive Pharmaceutical Ingredient Market Size, Share, and Trends Analysis Report by Type of Synthesis (Biotech, Synthetic), by Type of Manufacturer (Captive, Merchant), by Type, by Application, by Region, and Segment Forecasts, 2020\u20132027,\u201d\u00a0grandviewresearch.com<\/em>, Market Analysis Report (February 2020). The global COVID-19 pandemic has highlighted the need for the pharmaceutical industry to strengthen its supply chain. June 2, 2020 Volume 44, Issue 6 Page Number: 38\u201340 By Felicity Thomas, Pharmaceutical Technology The global population is aging, the prevalence of chronic conditions is rising, and medicines are becoming more widely accessible globally, which are all […]<\/p>\n","protected":false},"author":2,"featured_media":243971,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-243969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-events"],"aioseo_notices":[],"acf":[],"_links":{"self":[{"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/posts\/243969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/comments?post=243969"}],"version-history":[{"count":1,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/posts\/243969\/revisions"}],"predecessor-version":[{"id":987499239,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/posts\/243969\/revisions\/987499239"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/media\/243971"}],"wp:attachment":[{"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/media?parent=243969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/categories?post=243969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/boracdmo.com\/en\/wp-json\/wp\/v2\/tags?post=243969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n2. EFCG, \u201cAPI Manufacturers Address Critical Medicines Shortages Leaving Europeans and Americans Vulnerable and Dependent on Asian Supplies,\u201d\u00a0efcg.cefic.org<\/em>, Press Release, 12\u00a0March\u00a02020.
\n3. EFCG, \u201cAddressing the Acute and Complex Challenge of Medicine Shortages,\u201d\u00a0efcg.cefic.org<\/em>, Position Paper (January 2020).<\/p>\n","protected":false},"excerpt":{"rendered":"