CPhI panel members call for a radical shift in industry model to increase innovation

Expert panel warns in second Annual Report that IPR is stifling innovation, and predicts that a ‘process-centric approach will achieve global revenue savings, with green chemistry set to help drive manufacturing cost reductions’

CPhI Worldwide has published its second annual report in which a panel of world-renowned experts give their predictions for the industry and advocate radical changes that will revolutionise production processes and profitability.

In part one of the three-part report Vijay Shah, Executive Director and COO of Piramal Enterprises, Dilip Shah, CEO of Vision Consulting and Girish Malhotra President of EPCOT International, outline ideas to help make development and manufacturing more efficient.

The three experts are in agreement that pharma, in its present form, needs an evolutionary approach to remain sustainable in the longer term and open up access to drugs to more of the world’s population. Malhotra argues that for too long the industry has relied on selling its drugs entirely to the developed world and has not been actively focused on delivering increased process innovations that would bring cost savings and increased profits, while opening up new markets in the developing world.

Without change over the next five years pharmaceuticals will continue to increase in price, but only demonstrate limited increases in efficacy

Similarly, Dilip Shah believes that the current model of strictly implementing IPR in all markets has perversely resulted in diluting innovation across the industry. He suggests that reducing onerous IPR requirements in developing economies can increase innovation. 'The danger is that without change over the next five years pharmaceuticals will continue to increase in price, but only demonstrate limited increases in efficacy,' he warns. He is advocating a globally coordinated approach whereby there is a clear differentiation between developed and developing countries- with the latter taking a looser approach to IPR implementation.

Malhotra states that the current regulatory centric approach actively discourages innovation. However, he envisages manufacturing process savings could be as high 20-25% globally and would therefore open up new markets if the industry is willing to evolve. Universal adoption of Quality by Design (QbD), would optimise process efficiencies, improving product quality while simultaneously lowering costs- meaning that ultimately pharma will deliver more revenue by selling to more of the world’s population.

Already we are seeing big pharma looking increasingly to explore greener ways of working and the manufacturing process is a natural progression of this trend

In keeping with a more sustainable and global approach to drugs manufacture Piramal’s Vijay Shah prophesies green chemistry as another new method set to reduce costs and he calls on governments globally to support this by reducing regulation and increasing incentives. He envisages a new global standard, which he has coined ‘Green Chemistry by Design’ (GCbD), which should be ingrained within the R&D stage.

'Already we are seeing big pharma looking increasingly to explore greener ways of working and the manufacturing process is a natural progression of this trend,' he comments. 'Technologies such as catalysis, flow chemistry, and parallel screening are revolutionising process research by creating efficiencies and cost savings.'

In part two of the annual report Prabir Basu, Consultant, Pharma Manufacturing, Emil Ciurczak, President at Doramaxx and Brian Carlin, Director Open Innovation at FMC, advocate the creation of a 'pharmaceutical technology commons' and highlight the growing need for excipients and co-processed excipient development.

For revolutionary technologies to proliferate around the pharma community a 'pharmaceutical technology commons' is needed, so that new technologies can be shared openly and transferred more easily

One of the key findings is the need to implement QbD and Process Analytical Technology (PAT) to allow designer experiments to be alterable during a run, making developmental changes far quicker to implement. However, according to Basu, for revolutionary technologies like this to proliferate around the pharma community a 'pharmaceutical technology commons' is needed, so that new technologies can be shared openly and transferred more easily between different companies to help the industry advance more quickly on previous innovations.

Ciurczak believes that continuous processing will be one technology that will benefit hugely from a collaborative approach between branded and patented companies with widespread adoption predicted in as little as five years. Another major point of convergence is that the regulators should start examining the quality of manufacturing – using QbD and OPEX programmes – instead of the current quality by inspection approach.

Carlin forecasts that as QbD adoption increases, new excipients will finally start coming to market. Previously pharma had been risk adverse to excipient development; however, increasing use of continuous manufacturing and the increasing Cost of Poor Quality (COPQ) means that co-processed excipients in particular are likely to be increasingly developed in the future.

He warns that with regulators starting to use quality metrics and categorising applicants in terms of risk, COPQ is set to rise substantially.

Part three of the report looks at the pharma industry from a supply chain and contract services perspective, with three experts – Hedley Rees, MD at PharmaFlow, Hendrik Baumann, CEO of Arevipharma, and Lukas Utiger, President, DPx Fine Chemicals and Integrated Offering – providing analysis on how this market will adapt and grow.

One of the major problems is that many biotechs and virtual companies are looking for an exit part way through development

Rees believes that one of the major problems within the pharmaceutical development industry is that many biotechs and virtual companies are looking for an exit part way through development and larger companies are looking to develop only proven products, resulting in a severe ‘commitment dilution’ that is slowing down and hindering innovation.

Utiger suggests there is currently an imbalance between supply and demand of manufacturing capability, which is resulting in unsustainable price pressure. Furthermore, Baumann warns that if the increasing price pressures being experienced by API producers worldwide are not addressed, this will result in increasing GMP issues and threaten patient safety. As a result, he argues, we are at the start of a split within the contract services sector, which ultimately will lead to European API producers concentrating on flexible delivery across multipurpose plants, with Asian facilities concentrating on single use facilities for low cost commodity type production.

If the increasing price pressures being experienced by API producers worldwide are not addressed, this will result in increasing GMP issues and threaten patient safety

Utiger predicts increased strategic partnerships between pharma and key CDMO providers. Ultimately, this will result in several CDMOs having more than 10% of drug product and substance market chain in as little as three years' time. The use of outsourcing is also resulting in severe supply chain pressure and Rees foresees a continuation of the slow progress that has so far blighted government and regulatory proposals to tighten the commercial supply chain.

Baumann added that this is creating an unfair playing field for API producers, particularly with regard to cGMP, environmental protection and sustainability. Furthermore, as a direct consequence of increasing use of tender business we are likely to see future shortages of popular drugs due to decreased warehouse capacity.

The full CPhI annual report is available for download at http://l.cphi.com/annual-report2014.

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