With the industry experiencing dramatic change, from regulatory changes to investments in capacity and the uncertainty of the political landscape, we asked several industry heads to review the opportunities, challenges and trends of 2017.
Inflection point
Much has happened over the course of the year for the pharma industry, there have been a slew of opportunities through advancements, investments and expansions. Yet, the industry has also experienced challenges and is currently riding the tide of political uncertainty.
Despite these challenges, however, the European Federation of Pharmaceutical Industries and Associations (EFPIA) reported that the pharma industry represents a key asset to the European economy.1 Contributing both directly and indirectly to global economies, there can be no doubt pharma health is a matter of great importance.
Investments, expansions and acquisitions
Throughout the year, we have witnessed a lot of news on expansions, investments and acquisitions. Companies have been looking to improve operations to meet growing demand in various therapeutic areas.
As such, expansions were highlighted as a big opportunity for some of our invited experts. Cambrex, for example, fully integrated PharmaCore over the past year to enhance and complement its portfolio and manufacturing facilities in the US and Europe.
“Companies are facing a choice of whether to expand organically or strengthen through M&A activity,” said Simon Edwards, VP, Global Sales and Business Development, Cambrex. “We have moved past the stage where projects are judged solely on cost and price, but the whole value proposal, and one where quality is back again at the top of the list.”
Expanding into the emerging markets represented a significant win for Recipharm with the strategic acquisition of Kemwell’s pharmaceutical business in India. “The addition of Kemwell has hugely increased our development operation both in terms of scale and breadth of capabilities,” stated Mark Quick, executive vice president of corporate development, Recipharm. “Our Bengaluru facility is now our centre of excellence for stability studies, as well as adding US FDA and EU approved efficient manufacturing options to our business.”
Investing and expanding manufacturing capabilities ranked highly for both ChargePoint and Idifarma — the former investing in new manufacturing machinery to meet increasing containment demand, driven by growth within therapeutic areas, and the latter expanding its GMP manufacturing offering.
Serialisation — an enormous project
Serialisation has been discussed extensively over the past year and with the deadline for Europe coming in 2019 and already past for the US, this compliance requirement is considered by some to be a potential headache and for others a massive opportunity!
“The new serialisation requirements in the US and Europe are the biggest regulatory change currently affecting our industry,” emphasized Quick. “As such, they have been a key focus for pharmaceutical manufacturers throughout 2017 and are shaping the sector. It has presented a huge opportunity to us. In 2016, we committed to invest €40 million in our serialisation programme, preparing us for the European Falsified Medicines Directive (EU-FMD).”
Tjoapack have also made significant preparations for compliance through the implementation of fully aggregated serialisation in 2008. “This is proving to be a huge advantage in terms of preparing us for newly introduced legislation worldwide,” added Dexter Tjoa, director of corporate strategy, Tjoapack. “We are ready for the deadlines in both the US and Europe.”
Already, we have witnessed a delay in the enforcement of the US Drug Supply Chain Security Act (DSCSA) by a year due to a lack of readiness in the industry. This, according to Quick is leading to consolidation among contract manufacturers.
This viewpoint was shared by Jean-Marie Aulnette, vice president of EMEA Sales, TraceLink, who stated: “Lack of preparedness for serialisation requirements is already beginning to shape the pharmaceutical landscape, and the situation will heighten. Consolidation is likely among smaller industry players who lack the available resources to invest in new technologies and processes for compliance.”
“The enormity of serialisation projects has driven a trend towards outsourcing project implementation to specialist third-party suppliers,” said David Staunton, director of global managed services at Zenith Technologies. “As the deadlines for EU and US regulatory enforcement approach, the need to become compliant is becoming more urgent.”
Consolidation and the one-stop-shop!
As we have seen in the discussions around serialisation, there is an inevitable drive towards consolidation in the contract manufacturing space. “As the industry looks not only to outsource commodity services but also high-level expertise in R&D, the contract development and manufacturing organisation (CDMO) sector is evolving at a rapid rate,” stressed Claire Madden-Smith, SVP at Juniper Pharma Services. “Consolidation in the CDMO sector is expected to continue at around 10–20% for the next few years.”
This trend towards consolidation will also have an effect on the way that services are delivered. Quick explained: “Small, niche players are struggling to compete with larger CDMOs that can offer customers a more complete development and manufacturing service that simplifies their supply chain. CDMOs that can provide solutions across the globe, including supporting market access restrictions such as those in Russia and Turkey, are well positioned for growth.”
“The need for specialists and experts is as important now as ever — merely being a company with ‘capacity for hire’ is not an option,” continued Edwards. “The trend towards becoming a ‘one stop shop’ is still in vogue despite numerous attempts in the past to leverage value from the concept.”
Biopharma and the rise in high potency drugs
Growth areas witnessed this year have included the biopharma market — which has experienced a surge in the need for the development of potent compounds and an increase in conventional drug manufacturing using high potency active pharmaceutical ingredients (HPAPIs).
“In an industry that is seeing a surge in oncology and immune-suppressant therapies, and increasing demand for HPAPIs, there is a growing need for manufacturers to look at more innovative containment strategies to meet high potency handling requirements,” stated Avraam. “In this environment, ensuring operator safety, alongside protecting the drug product to avoid cross contamination (particularly in the case of aseptic processing), is a challenge that must be addressed.”
“Currently, approximately 25% of drugs in development worldwide are classified as highly potent,” explained Leal. “This number continues to rise, driven in particular by growth in the oncology market and cancer-related drugs, which account for approximately 60% of all highly potent APIs.”
Leal added that this growth is driving the need for agile CDMOs that have the experience and expertise to handle complex, low volume projects involving highly potent drugs. “Also,” he continued, “increasing regulatory, safety and environmental requirements are driving the need for specialist providers of high potency capabilities in the pharmaceutical industry.”
“Funding in this area has remained strong, which has greatly influenced the need for outsourcing,” commented Madden-Smith. “The high level of investment in biotech companies comes with significant pressures to deliver clinical results as rapidly as possible, especially in many therapeutic areas where there is a significant unmet medical need.”
Moving to the cloud?
An increasing theme has been the management of data, particularly in preparation for the upcoming serialisation requirements.
“With new serialisation requirements, companies are being forced to handle large volumes of data, and overcome the associated challenges such as data integrity and security,” revealed Aulnette. “As a result, cloud platform adoption is increasing, as companies realise that to simplify the exchange of data with supply chain partners, they need to be part of an established network. This is a trend that will only continue as new global regulations take hold and the supply chain becomes more complex.”
“In 2017, the industry has gradually begun to embrace Software as a Service (SaaS) and the idea of using solutions hosted in the cloud,” reported Dr Liz Covey-Crump — director of Business Development at Lhasa. “Pharmaceutical companies are beginning to realise that the scalability and agility of the cloud can support R&D, simplify clinical research and deliver significant cost savings.”
Avraam echoed this explaining that through embracing a more automated approach, the industry will be able to receive vital equipment performance data and generate audit trails faster and easier. “As a result, maintenance, health and safety and compliance teams in high potency manufacturing environments can ensure the safer and contamination-free handling of API and other formulation ingredients,” he said.
At SGS Life Sciences — Clinical Research, Wim Verreth (head of Business Development and Support) discussed the trends in the clinical trial space. “Obviously, strong R&D trends such as eSource, more specifically immediate electronic capturing of data at the bed side or ePRO (electronic collection of patient reported outcomes), and the use of wearable devices by the subjects improve the quality and speed of the data collection, and allows us to better monitor the overall safety and efficacy of the new treatments,” he stated.
“In the coming years, once security fears are eased, the market for cloud computing will undoubtedly experience huge growth,” summarised Covey-Crump.
Pan-Atlantic highs and European lows
The pan-Atlantic landscape had a boost with the recent formation of the ‘Mutual Recognition Agreement’ by the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA),2 allowing eight European drug regulatory authorities to conduct inspections of manufacturing facilities that meet FDA requirements.
“Under this agreement, US and EU regulators will be able to utilise each other’s good manufacturing practice (GMP) inspections of pharmaceutical manufacturing facilities,” said Leal. “This is a positive move and will bring greater efficiency across the industry.”
Casting a shadow over the year, however, has been Brexit and the implications this may have for the industry. We have already been informed of the relocation of the EMA to Amsterdam from London, with concerns raised over medicines safety with this upheaval and a risk of losing staff, resulting in a disruption of services.
“The biggest challenge Lhasa has faced in 2017 related to the uncertainty around Brexit – which in turn has resulted in two common challenges,” said Covey-Crump. “The first of these relates to the potential of participating in future EU funded projects; the second involves future recruitment of valuable skilled EU citizens.”
Final words…
“The pharma industry is at an exciting inflection point,” concluded Staunton. “This evolving industry focus, combined with the large-scale capital investments, is allowing clients to ‘make the most of now’ both this year and into 2018.”
References:
- https://www.efpia.eu/media/219735/efpia-pharmafigures2017_statisticbroch_v04-final.pdf
- https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm583057.htm
Contributors
- Simon Edwards — VP, Global Sales and Business Development, Cambrex
- Michael Avraam, global product manager, ChargePoint Technology
- Manuel Leal, business development director, Idifarma
- Claire Madden-Smith, SVP at Juniper Pharma Services
- Dr Liz Covey-Crump — director of Business Development, Lhasa Limited
- Mark Quick, executive vice president of corporate development, Recipharm
- Wim Verreth, head of Business Development and Support, SGS Life Sciences — Clinical Research
- Dexter Tjoa, director of corporate strategy, Tjoapack
- Jean-Marie Aulnette, vice president of EMEA Sales, TraceLink
- David Staunton, director of global managed services, Zenith Technologies