Future heparin incident may lead to a backlash against outsourcing and drug shortages
CPhI Worldwide, organised by UBM EMEA, has released the findings of its 2015 annual report (part iii, entitled: ‘Push-pull factors on growth’) live from CPhI Worldwide 2015 in Madrid. Dilip Shah, Chief Executive Officer, Vision Consulting Group; Vivek Sharma, Chief Executive Officer, Pharma Solutions, Piramal Enterprises; Prabir Basu, Consultant and Alan Sheppard Principal, Global Generics, Thought Leadership, IMS Health, looked at the implications of US trade law regulations on generics access, the growth of steriles manufacturing and outsourcing, and the positive impact QbD, ‘technology commons’ and ‘outsourced regulators’ could bring to bear on improving manufacturing standards.
For generics, the panel predicted that in the EU, the US and the developing world they offer clear benefits to reduce healthcare expenditure. Sheppard, strongly argued that there is a need to act now and start reducing any current negative incentives to increased generics adoption, and that a sensible pricing solution is required to increase use of generics rather than policies to lower their cost. In his article, Sheppard outlines how generics stimulate innovation in both the generics sector through improved efficiencies, but also, in drug discovery and development, and pharma should be less weary of their global impact.
However, Shah warned that the reauthorisation of the TPA-2015 will fast track the mega trade agreements that are poised to have the unwanted effect of significantly slowing global access to generics. The clear implication is that these changes are being put in place to benefit big pharma at the expense of patients, generics companies and healthcare bodies. He predicts that as soon as 2017, a slow down in the generics market will be seen, with the full impact of these ‘mega trade deals’ being felt in 2020. The most notable effect will be a reduction in generic competition, an increased ability for pharma to dictate prices in emerging markets and an easier process of patent extension.
Shah said, “If the TPPA is signed in 2015, it would begin from 11 Pacific Rim countries and accelerate with the conclusion of TTIP in 2016. The decline will extend to the US and 28 EU countries, besides members of NAFTA (2) and EFTA (4). The full-blown impact of these mega trade deals will be felt by 2020”.
In his article, Sharma predicted a hugely positive outlook for global steriles sales and anticipates that a significant expansion, 10 per cent per year, will be seen in this market over the next five years. The drivers for growth in outsourcing are primarily coming from a need for big pharma to de-risk its supply chain, using secondary manufacturing sites. It is also telling that pharma is seeking specialist CDMOs with technological capabilities beyond that of in-house pharma. In the longer term, it is foreseen this will lead to a consolidation amongst increasingly large players offering bespoke biologics and sterile services.
Novel drug delivery systems, and pre-filled synergies are also a key factor in growth, as they overcome potential compliance issues. Interestingly, whilst currently far smaller than the biologics sector, small molecule injectables are predicted to experience the fastest rate of growth. In the near team, drug delivery systems like Liposomes, PEGlyation, Depot Injections are also projected to see a spurt in the growth – especially in therapeutic segments that require efficient targeting of drugs.
Basu in contrast sees a mixture of opportunities and threats facing pharma manufacturing. In his view, there is a need to evolve the approach to regulation. Primarily, there is a need to start encouraging the sharing of techniques (technology commons) for the good of the industry, rather than keeping the majority of manufacturing process as proprietary. Forebodingly, Basu also warns and said, “If we don’t think about our approach to quality and outsourcing there is a possibility of another heparin type incident. Such an event, may even result in an overreaction to outsourcing by regulators and ultimately lead to crucial drug shortages as the industry attempts to adapt.”
Pharma is presently focused on transferring its manufacturing outsourcing to the lowest cost base, rather than taking an approach of improving costs through process efficiencies, as many other industries have successfully achieved (notably the car industry in Japan). Basu’s supposition is that these cost reductions may, in part, be lower simply due to a lower regulatory compliance, and FDA is unsuitable to monitor facilities on a global scale with the required regularity. He does, however, put forward an innovative solution, whereby the FDA trains a fleet of private certified experts who can inspect all facilities globally at least once per year and the costs should be born out by the industry (rather than by the US government as is currently the case with the FDA). Then, once these new quality cultures are embedded, QbD will reduce the need to inspect facilities so often, as process controls will be tighter.
Chris Kilbee, Group Director Pharma, CPhI, “Our goal at CPhI Worldwide is to provide a platform for the industry to share information, debate best practices and support pharma innovation. To help achieve this, in 2015, we expanded our content initiatives to include the CPhI annual report, alongside the pharma insight briefings, the pharma awards, exhibitors’ showcase and the pharma forum. We strongly encourage all our attendees and the wider industry to study the annual report findings closely. For instance, the conclusions that generics, high-potents, steriles and outsourcing are forecast for renewed growth means it is vital that CPhI Worldwide provides a global hub for partnerships to be harnessed through the ingredients zones at CPhI and through our sister brands ISCE, P-MEC and Innopack respectively. Ultimately, it is the dissemination of these trends, potential industry threats and predictions that will sustain further growth over the medium- and long-term. CPhI is the global stage for this debate and our exhibitors and attendees should use these vital insights, alongside our other content initiatives, to ensure they have the best strategic analysis and information to support the most productive business decisions at the show and over the next year.”
Comments are closed.