Discussing the upcoming and ongoing trends in the contract pharmaceutical sector, Dr Kevin Robinson recently caught up with some of the leading figures in the market to find out more
Andrew Henderson, Sales and Marketing Director, Sterling Pharma Solutions
Opening the debate and looking at what the market might deliver during 2019, Andrew Henderson, Sales and Marketing Director at Sterling Pharma Solutions, notes: “In 2018, we saw a lot of M&A activity throughout the pharmaceutical industry as companies looked to consolidate the market and strengthen their own service offerings."
"It’s likely that this will continue into 2019 as Big Pharma continues to refocus on its core capabilities and large CDMOs continue to diversify and bolster their existing offerings to support this. As such, the demand for specialised services — and a comprehensive understanding of them — will continue to rise as well. We’re also seeing huge growth in the US market, with emerging biotechs, virtual companies and Big Pharma continuing to build their presence in this sector. As we move further into 2019 and beyond, this will continue to be a key growth market for contract service providers.”
“The pharmaceutical industry has experienced a lot of change in recent years, some of which will impact the sector going forward,” adds Mark Quick, Executive Vice President of Corporate Development at Recipharm. “A key outsourcing trend we expect to see throughout the year is a continuation of mergers and acquisitions and consolidation strategies."
"Some CDMOs are merging with smaller companies to enhance their capabilities and service offering. Offering end-to-end development and manufacturing services enables contract service providers to tackle the evolving needs and demands of customers, ultimately streamlining a drug’s route to market.”
“Another trend we’ve observed,” he says, “and one that we expect to continue, is the use of the 505(b)(2) new drug application (NDA) pathway. This route to market has gained popularity as it contains full safety and effectiveness reports but allows some of the information required for NDA approval, such as efficacy information on the active ingredient, to be derived without having to conduct new trials."
"As new drugs can be approved via the 505(b)(2) pathway using a different delivery route, there is a growing interest in orally inhaled products and nasal sprays. As such, there is a high likelihood that drug manufacturers will explore development techniques for inhaled delivery, such as spray drying, this year.”
Mark Quick, Executive Vice President of Corporate Development, Recipharm
“Additionally,” comments Mark, “as an extension of serialisation requirements, pharmaceutical drug manufacturers may implement aggregation capabilities following the enforcement of the EU Falsified Medicines Directive (FMD) on 9 February to prepare for any potential legislative reforms. Aggregation is expected to become a compulsory procedure among pharmaceutical firms owing to the agreed notion that it drives supply chain efficiency.”
Andrew Henderson also feels that, recently, there has been a consolidation of demand for niche drug products across the sector as companies look to find novel therapies for smaller patient populations. These drug products are increasingly complex to develop and manufacture; as such, they require the specialist support of a contract development and manufacturing organisation (CDMO) who can be agile and accommodating to the needs of each project.
And, adding to the fray, Dexter Tjoa, Director of Corporate Strategy at Tjoapack, observes that pharmaceutical companies have increasingly been looking for ways to reduce costs and waste, as well as improve efficiencies. “I expect we’ll see more of that this year,” he says.
“For example, postponement packaging is something we’re exploring at Tjoapack to streamline the pharmaceutical supply chain. By keeping products market-agnostic and only packaging product for a specific market when demand arises, we can better manage inventory and react more quickly to unpredictable demand. This process allows us to streamline the supply chain, reduce the amount of waste products generated and improve the time it takes to get medicines to the market — as products can be distributed in a matter of hours.”
Indeed, more pharmaceutical companies are starting to recognise the benefits that postponement packaging could offer for small-volume products and for supplying to markets with unpredictable demand. Implementing postponement could grant drug companies shorter lead times and considerably improve flexibility, making it easier to avoid medicine shortages.
“We’re also looking into blockchain and its potential to streamline the supply chain by generating data management, storage and transfer efficiencies,” he says, adding: “Blockchain has significantly increased the digitisation opportunities that are available to pharmaceutical companies with the ability to have a cross-company immutable log of transactions that is not governed by any one organisation and is completely secure. This is supporting the outsourcing trend as specialist expertise is required to leverage the true potential of blockchain.”
Manuel Leal, Business Development Director, Idifarma
As demand for contract service providers continues to grow, I ask the panellists what they attribute this to. “Generally speaking,” says Andrew, “pharmaceutical companies are refocusing their internal resource on their core capabilities. As a result, they require reliable and experienced partners who can provide services that support their drug development and manufacturing goals. Specialist expertise is where contract service providers can add the most value, such as in the area of hazardous chemistry. It is the level of insight and guidance that these CDMOs can offer that is driving demand.”
Mark Quick explains that as the market continues to evolve and grow at a rapid rate, pharmaceutical firms are exploring the different supply chain opportunities available to them to improve efficiencies and support the success of their molecule. “They are increasingly opting to outsource their drug development needs to a CDMO partner, as opposed to infrastructure ownership, for a number of reasons.”
He adds: “A primary factor impacting the demand for contract service providers is the increasing adoption of M&A strategies. The integration of facilities previously owned by Big Pharma into CDMO operations ultimately enhances the scope of capabilities and thus improves end-end-end development and manufacturing offerings."
"Through strategic acquisitions, CDMOs gain access to innovative technologies and specialised resources. As such, clients recognise that, by outsourcing, they can access experienced teams, specialist equipment and the necessary capacity to bring their products to market efficiently and cost effectively. Ultimately, our customers come to us to manage the complexity of their projects. CDMOs that can streamline the drug development process, taking products from early phase development to commercialisation, will thrive in today’s outsourcing environment.”
Daniel Tedham, Managing Director, Wasdell Manufacturing
“At Idifarma,” says Manuel, “we believe this derives from the degree of expertise now required within the industry to support the demand for such complex drug products. The development of these medicines requires innovative technologies and skilled teams, which are well suited to that of contract services partner. As well as this, the evolution of the virtual business model within the sector, as well as the growth of small biotech companies, has led to a reliance on third-party providers for the development and manufacture of drug products.”
“Many new pharmaceutical products no longer require mass volume production as a number of breakthrough therapies are now specific to smaller patient groups or for rarer diseases, observes Daniel Tedham. “Large pharmaceutical companies have historically contracted out the smaller batches or SKUs that require greater flexibility. As a result, they may not have the capabilities to manage small-scale production in-house as their internal operations, equipment, processes and overheads are not best suited for this type of work.”
“Additionally, it’s evident that there is a greater number of much smaller virtual development companies making new drug discoveries and gaining market authorisations. Once approval has been gained, they then need to find partners to assist them in the commercialisation of their product as they do not have the capabilities internally or through their initial development partners.”
“Specialist expertise is key to this,” adds Dexter: “Companies that take a proactive approach to developing their packaging solutions and regularly explore and implement new technologies inevitably find themselves better equipped to tackle challenges. The benefits of engaging experienced contract service provider with previous experience of new technologies and processes can be invaluable when it comes to shortening lead times and ensuring the best results. Companies are looking for experts who can advise them on improving efficiencies, rather than just providing a standard service.”
Discussing which services are in demand at the moment, Andrew states: “At Sterling, our expert hazard evaluation and process design teams mean we can handle even the most difficult-to-handle chemistries. With more complex molecules continuing to enter the drug pipeline, this is becoming an increasingly important service for companies looking to outsource. The ability to use hazardous chemistries can often provide a more direct route to the molecule and, as a result, shorten turnaround times.”
Dexter Tjoa, Director of Corporate Strategy, Tjoapack
“We’ve seen growing interest in development techniques for inhalation products,” adds Mark: “Orally inhaled drug products provide a range of benefits compared with other dosage forms, such as a more targeted delivery and a reduction in adverse effects. At Recipharm, we support several dosage forms for new chemical entities (NCEs) and generics, such as dry powder inhalers (DPIs) and pressurised metered dose inhalers (pMDIs)."
"The 505(b)(2) regulatory pathway, wherein NDAs can be fast-tracked if existing data is available for the API, presents new opportunities for drug developers. We expect to see greater demand for our inhalation services as pharmaceutical companies look to find new drug delivery routes for previously approved drug products to deliver better therapeutic effects.”
Manuel comments: “We see great demand for the manufacturing services of novel products, particularly that of highly potent oral drugs. Many of these drug products require low manufacturing volumes and specialist technologies, which is often what attracts new business to Idifarma."
"Most recently, we have invested in our GMP spray drying capabilities for highly potent products, a novel technology that offers a unique solution to the challenges of solubility, bioavailability and stability. As the industry struggles to find new drugs that improve existing therapies, the need for more innovative processes to advance the galenic formulation of a finished product has become vital. Spray drying does just that, supporting the industry to alter drug administration and aid patient compliance.”
The demand for more flexible supply to meet specific demand is growing. “Late stage customisation and just-in-time (JIT) logistics is a service that is very much becoming an everyday requirement here at Wasdell for products that dictate small batch sizes, such as orphan drugs or for clinical trials,” says Daniel.
“To keep costs low, manufacturing and primary packaging can be completed as a whole; it can then be stored in a generic form ready for customisation — such as for a specific market/patient — right before dispatch. This keeps the main production costs as competitive as possible but allows us to adhere to the specific requirements needed for individual markets, patients or trials. It also allows inventory to be kept to a minimum and enables us to avoid packaging rework or potential write-offs because of stock expiring before being used.”
“Such a format is not without risk,” he adds: “A robust combination of infrastructure, procedures and technology needs to be in place to ensure that issues do not arise, and that the product is customised to the specific requirements that are requested in a very short period of time. We have invested heavily in a system that ensures the seamless transfer of specific information from our customer, unique master batch records (MBRs) creation and approval, stock oversight, control and status, as well as minimising any possibility of mix up or redundant stock.”
Concluding the initial session, Dexter says: “Our customers are typically looking for more cost-effective and efficient ways of tackling pharmaceutical packaging. As a result, they often come to us for advice regarding how they can streamline their supply chains. We are constantly looking for new ways to adapt our service offering; last year, for example, we invested in a new blistering line equipped with late-stage customisation printing facilities."
We have since launched our postponement packaging service to give customers more flexibility and better supply chain management systems. In addition, we are also looking to further invest in our facilities to allow us to increase our capacity and handle larger volumes. Biotech products are also growing in popularity and these customer appreciate the tailored approach.”
Readers of this article may find our previous roundtable to be of interest as well.
Part two of this discussion will appear in the May issue of Manufacturing Chemist. The April edition is available here.