Outsourcing of Pharmaceutical Services
Fred Higton, head of formulation development at Penn Pharmaceutical Services, sheds some light on the outsourcing of pharmaceutical services
Fred Higton, head of formulation development at Penn Pharmaceutical Services, sheds some light on the outsourcing of pharmaceutical services
It has been estimated that the pharmaceutical services business is worth around Euro 18bn (US$20.7bn) per annum worldwide, of which about Euro 16bn is in contract manufacturing and the remainder in services; including preformulation and material characterisation, formulation and reformulation, the development and/or cross validation of stability-indicating analytical methods, manufacturing and packing of clinical trials supplies and Qualified Person services. Research has also shown that this market is currently growing at the rate of 3-5% per annum. In addition, the CRO market is estimated to be worth a further Euro 2.5bn.
why outsource?
There are a number of reasons why an organisation might consider outsourcing work, the first being a lack of capability within the contracting-out company. This may relate to equipment, specific facilities, the necessary skill sets for particular tasks or a lack of available time.
Second, outsourcing can be an effective way of 'resource smoothing'. A discrete piece of work can be contracted out at a time of peak demand, thereby reducing the loading in the short term.
The success of such an operation lies in the choice of the piece of work to be outsourced, the choice of contractor to undertake the work, the clarity of the brief and the management of the output achieved.
Third, there may be a need within an organisation to focus on the core business and avoid the distraction of minor or local brands. Such brands are often revenue-generating but can focus effort away from important strategic products. Outsourcing avoids difficult priority decisions and caps the spending on non-core products.
Contracting out may be a means of accessing specific skills which a company does not have at its disposal. A common example is access to clinical facilities for the conducting of volunteer studies and clinical trials. Such facilities may be located within teaching hospitals or may be stand-alone units, but in all cases they rely on the availability of specialist nursing and medical capabilities and equipment.
The preparation of clinical trials supplies (CTS) is another specialist service, and with the introduction of the European Clinical Trials Directive 2001/20/EC in May 2004, all such materials will require to be produced under GMP conditions.
Such facilities for the preparation of CTS may not be available in-house and so outsourcing becomes the preferred option.
Outsourcing of services potentially provides a faster route to market. Specialist external services can often respond more quickly than more general internal resources, simply due to the fact that they are repeatedly undertaking similar types of work, and internal queuing for access to key resources is obviated.
Finally, budgetary restrictions may compel a company to outsource work. A common means of controlling corporate budgets is via headcount. Thus, while an organisation may not have the budget to take on extra staff, money may be available to undertake a specific and finite piece of work that does not involve any long term human resource commitment.
Over the past 10 years an increasing number of virtual companies have been formed, often with relatively few members of staff and supported by venture capital. Such organisations usually have access to a molecule or a series of molecules but little or no internal development capability.
Such companies will outsource the whole of the development chain and often establish a close working relationship with a small number of selected contractors.
Other organisations have only part of the skill set required to complete the development process internally, and these will tend to outsource specific operations - for example clinical trials supplies manufacture.
emotional ties
Large pharmaceutical companies may outsource minor and local brands and again would tend to wish to outsource to a single 'one stop shop' for ease of control and focus of accountability.
One issue that has arisen in such cases is the reluctance of some people within such a company to 'let go' of a product on which they have worked and to which they have an emotional tie. If not properly managed this 'soft issue' can adversely affect the whole outsourcing operation and needs to be handled with some sensitivity.
Analysis of Penn's client database for formulation development gives an indication of the most popular reasons for the outsourcing of pharmaceutical services.
As indicated, the majority of clients outsourced to gain access to specific skills or facilities - usually access to GMP manufacturing facilities and QP release for clinical supplies.
A key stage in the development process for outsourcing companies is the formulation and the manufacture of clinical trials materials for Phase I and II studies. At these early stages of the process, the two most precious resources are the Active Pharmaceutical Ingredient (API) and time - the usage of the API has therefore to be optimised and the time taken to reach the clinic reduced to a minimum.
Toxicology trials will usually have been conducted on non-GMP material, but Phase I studies should use GMP drug (mandatory from May 2004). Analytical methods initially developed on non-GMP material will need to be revalidated for the GMP API source.
The most material and time-efficient way of producing Phase I samples is to fill drug by hand into a hard gelatine capsule shell on an individual capsule basis. While this process can be automated, the losses of API may increase compared with hand manipulation by skilled operators.
Typically, 20-50 capsules would be prepared for a trial, with a further 20 being used for analysis, to allow QA/QP release of the batch, and a further 60 being kept as retained samples. The product would then be dosed to healthy volunteers to determine the pharmacokinetic profile and bioavailability of the drug.
This simple approach may serve to provide material for 'proof of concept' studies. However, some measure of formulation work may need to be applied before progressing to this stage of development. The drug may have shown itself to be acid-labile in the stomach and so the test capsule would need to be enteric-coated, allowing it to pass undissolved through the stomach, and release the drug on reaching the relatively elevated pH of the small intestine.
early trials
The quantity of material needed for the trials may mean that automated or semi-automated production methods are required or the preferred dose form may be other than a hard gel capsule - for example, a tablet - and there may be a requirement to introduce the final dose form into the early trials. In all these cases, formulation of the dose form will be required.
As a result of the shortage of API at these early stages of development, it is essential that this work is undertaken using minimum quantities of active material. There are three key elements to achieving this:
first, the characterisation of the API so as to be able to predict its formulation characteristics;
second, the experience of the contractor in dealing with similar materials and formulations, and,
third, the ability to miniaturise the processing. For example, the Riva Picola (shown) is able to produce tablets and generate compression and ejection force data (relevant to high speed compression) using as little as 200g of blend. Similarly, small batches of capsules, liquids and semi-solids can be produced.
Fast delivery of early stage clinical trials allows the rapid progression of successful molecules, but equally importantly, allows the fast kill of unsuccessful ones, freeing up the resource for other APIs. The contracting out of some services can help to speed this process.
smoothing peaks
The pharmaceutical services industry is a growing industry, worth multi-billion euro, which offers a variety of services from formulation to contract manufacturing.
The outsourcing of services can help to resolve priority clashes within a company, smooth peaks in demand and, most importantly, can lead to faster entry into the clinic.