With only four months to go before CPhI kicks off in Madrid, and less than two months before the CPhI Innovation Awards entry deadline on31 July, Innovation Award judges Hendrik Baumann (CU Chemie Uetikon) and Hans-Leonhard Ohrem (Merck) discuss key issues facing pharmaceutical innovation
?Where does innovation fit in the wider picture of today's highly challenging business environment for global pharma services? This was the question put to CPhI Innovation Award judges Hendrik Baumann, commercial director, CU Chemie Uetikon, and Hans-Leonhard Ohrem, technical manager, Merck, both of whom agree on one thing - that innovation is key to surviving the economic downturn and this is particularly true for high-cost regions such as Europe and the US.
"These regions will always depend on being ahead in innovation, since they can never compete on cost over the long term," says Ohrem.
With globalisation a major force in the pharma sector, many companies have already moved their innovation centres to meet future development strategies. But in terms of where innovation is likely to be placed in the near future, Baumann believes the old models still apply - in the longer term, however, he sees change on the horizon.
"Typical hotspots such as the California and Boston areas of the US will still be the motor of innovation in early development, while Europe will still be on the top from a short and mid-term perspective," he says, adding that in the longer term, Asia - especially China - will develop from "copycat" to become the engine of innovation. Singapore, Taiwan and South Korea will also be top players in the field of future innovation.
Ohrem also believes that in the short term, Europe and the US will maintain the focus of pharma innovation, while in the mid- and long term, India and China will catch up significantly due to their huge manpower and investments in science and education.
"China especially is already scientifically respected where universities and state institutions are concerned," he says. "Company research of the multinational corporations will follow this trend some time later."
According to Baumann, one field of study that has most to gain in the near-term from technical innovation is that relating to Process and Analytical Technology (PAT), and this area is likely to show an increase as a result of the growing requirement for full process control and stricter regulations.
In addition, "innovative biotechnology, especially yield increases per volume in processes using the mammalian cell culture technology, will deliver more promising results from continuous innovation," he says.
One of the technology areas where potential "payback" from innovation is especially exciting for the future, according to Baumann, is in the production of smaller quantities of APIs or actives under fuller control of the process - for example using microreactors or related technologies.
High potency drug production will be another area for innovation, he believes, while the development of highly efficient biotechnology processes will offer a great opportunity to gain competitive advantage.
Ohrem sees formulation and drug delivery solutions as having most to gain in terms of innovation: "Outsourcing services are less attractive in times of crisis and API development is rather long-term. But a new formulation, an improved bioavailability or better user-friendliness can pay back in shorter timescales.
"Since more and more of the new API developments have weak bioavailability, the need for innovative drug delivery is prevalent. Drug delivery will become an integral part of drug development together with the API," says Ohrem.
But with the present financial climate, is investment for pharma innovation under threat?
"Driven by daily events and the permanent request for cost savings - especially in big pharma or in quoted companies - pressure to reduce r&d spending will increase," says Baumann, adding: "While small and medium size entities may be more innovative, they might also have difficulties in securing the necessary funding for their work."
Ohrem's view on this matter is slightly more upbeat. He maintains that the lifecycle of pharma development projects is much longer than this economic downturn and so r&d investment is unlikely to be greatly affected. However, capital availability is likely to influence the strategy of M&A activities, he says.
"In the innovative and ethical pharma industry, expenditures in r&d are not sufficiently flexible simply to cut in one year and then to restore in the next. The potential damage would be much greater than the potential cost savings," he stresses.
Against the background of the credit crunch, other industries, such as the automotive sector, have turned to green technologies as the means to rebuild their market; the judges were asked whether it could also work for the pharma sector.
"When green technologies provide a cost-saving or a positive input to process performance and yield, there is no question that these technologies will be used in the future," comments Baumann. "There is no question that green chemistry will come - it is only a question of when will it come?"
However, Ohrem believes the focus in pharma is more on safety and innovation since the scale - and thus the impact on the environment - is much smaller than is the case for the general chemicals industry: "The focus is for higher API activities and efficiencies, driving towards biotech APIs - a technology small in scale and green by nature!"
Entry reminder
The CPhI Innovation Awards entry deadline will be Friday, 31 July. Nominated finalists will be advised by mid-September with their entry presentations taking place on 13 October - the first day of CPhI Worldwide in Madrid. The winners will be announced during that evening's Exhibitor Party.
Detailed enquiries can be made to Kyra van den Berg on T +31 346 559 459 or by email to: innovationawards@ubm.com
The shortlisted entries will feature on www.cphi.com, www.icsexpo.com and www.bioph-online.com - and in Madrid, on stand 10G16.
