- S.2615 - Increasing
Competition in Pharmaceuticals Act, https://www.congress.gov/bill/114th-congress/senate-bill/2615
- H.R.4784 - Lower Drug Costs through Competition Act, https://www.congress.gov/bill/114th-congress/house-bill/4784
Thursday, May 26, 2016
Can Senate And House Bills S2615 And HR 4784 [Increasing Competition in Pharmaceuticals Act] Alter the Pharmaceutical Landscape?
Senate and House bills [S2615 (1) And HR 4784 (2)] are an interesting attempt by the US government to increase competition in the pharmaceutical industry. One would and if they have not asked the question, should ask why the pharmaceutical industry has to be coaxed or nudged to compete. Shouldn’t that be the natural part of the business process for the companies to compete, be the most profitable and have the largest market share?
A review of the two identical bills suggests that there are issues with the proposed bills. In my estimation, it is highly unlikely that the US government or for that matter any government would succeed in guaranteeing the necessary lower priced generic drug supply. Desire to compete on product quality, price and profits has to come from within the industry. Government has to lower the regulatory barrier while holding companies accountable for any missteps.
Two proposed bills are a half-hearted approach to generate enthusiasm in the industry but red tape and slow process will mire the path to reduce time to market.
Language of the proposed bill “The Secretary shall prioritize the review no later than 150 calendar days after the date of the submission of an application that has been submitted and accepted for review under this subsection, or on a supplement to such an application” suggests to me very clearly that regulators are the bottleneck and these bills do not solve the problems.
The proposed bill suggests intervention by the Secretary “no later than 150 calendar days”. This in itself suggests that is system is flawed. Applications should be sequentially prioritized as they are filed. If the regulators cannot get the review completed on a timely basis and get the product commercialized, we all need to look at the value of the proposed bill. Industry and regulators need to develop and promulgate a program that that assures quality and safe drugs at the lowest price on a timely basis.
I suggest the following modifications to the proposed Senate and House bills. Industry and the regulators have to on top of their game to deliver the best results.
Since company’s intent is to make profits, they should have every “t” crossed and “i” dotted about the process and method of manufacture before they submit review application to the regulators. Industry needs to wean itself from the regulators. Do this or that or this is missing or explain why is a clear dialog between the company and regulators is an indicator that the company does not and would not have command of the process and produce products by repeated analysis [quality by aggravation].
Company’s submission of the best of the technology, quality control processes, inventory management and business process information would be clear indicator that they can commercialize the product as fast as possible. Such an attempt will reduce the regulatory review process and time. That should create competition. If the submitted information is flawed or incomplete, the application under review should be returned to the company for completion and if the company decides to submit their ANDA application, the process time clock would start all over again. This would be an excellent indicator of company’s command and capabilities of commercializing a process that produces quality products. Repeated back and forth between companies and FDA would suggest there are serious issues at the companies.
US Legislature has recognized that there are delays in getting necessary approval from the USFDA. To expedite the process review the “review clock” should start from the day ANDA approval application is submitted. Regulators should be given maximum of 150 days from the date of filing to finish the review and act on the application. If the company has submitted all of the necessary information and their application can be approved in 150 days or less, they should be given “priority review voucher” which they can use for future submissions or sell to any other company. Issuance of priority review vouchers could be on a sliding scale. If the company’s ANDA application is approved in 90 days, Applicant Company gets two “priority review vouchers” and one “priority review voucher” if after 120 days.
My conjecture is that the proposed changes in the Senate and House bill would get the ANDA approved faster, increase competition and lower costs. A transparent ANDA application progress indicator that is updated on FDA website would be of great value. Some of the vested interests would intervene but my hope is that the best should come out that would benefit companies, patients and the pharmacy benefit managers. Current Senate and House bills are toothless and worthless as far as lowering drug prices and increasing competition.
Girish Malhotra, PE
Tuesday, April 12, 2016
In the recent years we have seen increasing drug shortages and higher prices (1). There has to be a solution. Recent personal conversations (2,3) about the issue reinforced my thinking about a potential solution that I would like to share in this post. It could be a start of a conversation and we collectively could develop mechanisms that could control persistent drug shortages and higher prices. Many different solutions (4,5), too many to reference, have been suggested but they are accessible through search.
Modified elements of Orange Book (6) and Food and Drug Administration Safety and Innovation Act [FDASIA] (7) can be used to reduce drug shortages and lower high prices.
Orange Book lists companies producing each drug. Once a company associated with a drug is included in the Orange Book, the drug becomes evergreen for the company. Under FDASIA (8) company is obligated to inform the regulatory body of its intent to discontinue or have an interruption in the supply of a drug.
Companies have six months (7) to inform regulatory bodies about discontinuations and interruptions. In the case of interruptions six months might not be sufficient time to assure supply from alternate suppliers and shortages can happen. Interruption to me point to supply chain issues. They are correctable if companies make an effort to assure proper raw material and equipment availability for the drug. If diligent effort is not made to assure raw materials and equipment availability delays will continue. Under such circumstances regulatory bodies, healthcare systems and patients have no recourse but make do with whatever they can. Such situations can result in loss of life. They also become an opportunity for the price gougers who can produce the needed drug.
One potential solution could be to have companies submit to the regulatory bodies their expected production plan for the life saving drugs. Companies are not going to like this but it would cajole companies to improve their operations. Mutual cooperation would be beneficial for all. Life saving drug definition could be a contentious issue.
If companies cannot correct the supply chain issues there is another consideration and that would be “company looses its evergreen production and marketing status for the drug in question after an agreed time e.g. 6 or 12 months after the first incidence”. Companies would have to make an effort to prevent loss of their drug evergreen status. Delisting of companies would be published.
In addition, if the company loosing its evergreen right wants to regain its production and marketing privileges, they would have to re-apply for regulatory approval. This will force companies to manage their operations efficiently. My thinking is that companies would have to make an effort to retain their evergreen right for a drug.
Companies looking for opportunities could use the interruption, short supply and discontinuation list to enter the market. Such list would also provide existing suppliers an opportunity to increase their production volume through use of better manufacturing technologies and increase their patient base and profits.
Companies are not going to like “delisting of their evergreen status”. I can conjecture opposition to the proposal but the regulatory bodies need to take an aggressive action for the issue (shortages and blatant price increases) at hand. Unless forceful benefit/loss become part of the FDASIA, my concern is that shortages and price hikes would continue. If we want to make a reduce incidents of drug shortages and astronomical price increases, we need to be bold.
Girish Malhotra, PE
- Dr. Janet Woodcock, M.D., Director, Center for Drug Evaluation and Research, US Food and Drug Administration, April 10, 2016
- Dr. Albinus D’Sa, Special Assistant to the Office of Process and Facilities, Center for Drug Evaluation and Research, US Food and Drug Administration, April 11, 2016
- The FDA can single-handedly reduce drug price-gouging. Why is it waiting? http://www.latimes.com/business/hiltzik/la-fi-mh-the-fda-can-single-handedly-stop-20160105-column.html accessed April 10, 201
- Greene, Jeremy A, MD, PhD, Role of the FDA in Affordability of Off-Patent Pharmaceuticals, JAMA, pg. 461-462, February 2, 2016
- Orange Book 2016, accessed April 9, 2016
- Food and Drug Administration Safety and Innovation Act, accessed April 9, 2016
- Food and Drug Administration Safety and Innovation Act, Title X-Drug Shortages pg 107-109 accessed April 11, 2016
Monday, January 18, 2016
The following was posted on January 15, 2014 on www.pharmaEvolution.com now defunct.
Based on what has transpired in the last two years, I am writing an update that will be published in few days. I thought an old post would be a good preamble for the future.
Wednesday, January 15, 2014
The human race has one significant weakness. We all want to know what the future holds for us, and we want to know now -- hence the popularity of fortune-telling and such "fields" as astrology. In our desire to predict tomorrow, however, we often forget simple cause and effect. What we do today helps determine what happens tomorrow. For instance, every new developed and approved drug, in efficacy and in price, directly impacts company and industry profits.
Despite ongoing product-quality issues, drug companies have been profitable. However, this picture is about to change. Some say that it has already begun to change. Clearly, what we do today will shape pharma's future.
Here are my predictions for the industry over the next five to fifteen years. How do they compare with yours? As you'll note, I see the status quo prevailing in some cases, forcing change to come from unexpected places, such as regulatory agencies or outside forces. But what do you think?
1. Pharma companies will have to figure out how to reach the world's masses, rather than small patient populations, if they are to succeed in the long term.
2. On average, the industry's success rate of development and commercialization, for both small molecule and biotech drugs, will not change much from its current level. “Eroom’s Law” still limits pharma's destiny.
3. High drug pricing soon will be frowned upon and discouraged by PBMs (pharmacy benefit managers) and hospitals.
3. High drug pricing soon will be frowned upon and discouraged by PBMs (pharmacy benefit managers) and hospitals.
4. Instead of becoming “process-centric,” pharma will stay “regulation-centric.” Process-centricity, if adopted, would allow companies to exceed regulatory requirements, which could also avoid many issues that have created public relations and financial headaches. Current regulatory guidelines and requirements discourage change. Since changing an existing process requires approval, it is still perceived to be a long and expensive step, and something to be avoided.
5. Industry will hedge in adopting many of the internal changes (manufacturing methods, technology, and supply-chain improvements) that could improve profitability and move from the current quality by analysis/aggravation to a quality by design approach. Again, this is due to regulatory constraints. Short patent lives for the ethical (brand) drugs will impede innovation in manufacturing technologies. At the same time, most generics manufacturers have been in business too short a time for their managers to grasp the value of better technologies and methods.
6. Since current or higher level of profits can be achieved with the current inefficient practices, industry leadership does not see any value in improving its product development, business, and technology practices. External forces will drive change.
7. With not much forthcoming from the industry to improve its manufacturing and business practices, regulatory bodies will enact regulations that will force the industry to adopt better practices. This tug of war will continue, unless the industry takes the lead.
8. Continuous formulation processes could be a reality in the next five years for new drugs.
9. Continuous API manufacturing is possible, but it will require a different economic and manufacturing model.
A shift is taking place in the global pharmaceutical businesses, whether we like it or not, and is being brought on by generics manufacturers based in developing countries. Pharmaceutical companies will have to take radical measures to retain or increase their revenue streams and profits.
A shift to a new model from the current model in new drug discovery, development, manufacturing technologies, supply chain, conservation, and sustainability requires an “unreasonable man” as described by George Bernard Shaw. ("The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.")
Significant innovation is feasible in manufacturing and its support functions. For it to happen, though, the pharmaceutical industry will have to move its focus from “regulation-centricity” to “process-centricity.” The industry still appears unwilling to take the steps required for change.
The world and its inhabitants would clearly benefit from better and higher availability of lower cost drugs, while companies would be able to improve their profits from the current levels. I view this as a win-win situation. What do you think?
Girish Malhotra, PE
Monday, December 7, 2015
Obviously the question shouldn’t be asked because the answer is clear at least to me. Manufacturers of the active ingredients and their formulators, who would be or are producing quality products with the least bit of in-process testing, should be the drivers. Done right the first time, I would call that QED (quod erat demonstrandum) from my high school geometry days. QED in geometry happens only when we understand and apply fundamentals to solve a problem.
QbD in manufacturing would be equal to approaching geometry’s QED if everyone would apply science, engineering and business basics to create the best processes. If we do not apply basics to design and manage a process, we will not have command and it will produce quality product but only after repeated analysis and/or aggravation (my connotation for “A”), an expensive proposition. In addition, repeated sampling and analysis also can become an opportunity to doctor the test results, potential 483 citations. We can placate ourselves by imagining that we are applying the fundamentals but repeated product analysis clearly suggests shortcomings.
Unfortunately, in pharmaceuticals, some would disagree with my conjecture. Why do I say that? US FDA and others few years ago acknowledged QbA (quality by analysis) “aggravation” is currently the most used method to produce quality products and suggested guidelines to cajole the pharmaceutical manufacturing to incorporate the best manufacturing technologies, alleviate QbA syndrome and move to QbD (QED practices). Noble gesture and that would have benefited companies and humanity at large, but it has not happened.
If QbD had become part of the manufacturing routine from inception, landscape would have been different. Everyone would have been presenting case studies of accomplishments at conferences and we would not be discussing PAT, QbD or QbA. Continued discussion about these three acronyms at conferences and in print suggests that what the regulatory bodies were expecting has not happened.
What has me mesmerized is that in every manufacturing and even in service businesses using the best practices and processes to deliver highest quality deliverable is the norm. However, pharma is still stuck in “QbA” mode. Companies practicing QbD have and will benefit.
Had QbD become part of every API manufacture and their formulations, in my book, the resulting manufacturing practices would have lowered costs, improved profits and reduced quality issues. We scientists and engineers take pride in our accomplishments and would be blowing our horns at the highest pitch. Noise would have been deafening. Did we fail or our work environment is/was not conducive to practice what we are taught? Do we need self-reflection?
One of my friends in the consulting business suggested reviewing few recent articles related to pharma regulations and innovations. General discussion theme of these articles was innovation in drug discoveries, R&D, impact of price controls in Europe and regulations. Inefficiencies in drug discovery (R&D) were acknowledged but no solutions were suggested. Development and practice of the best manufacturing practices for the manufacture of APIs and their formulations was not part of the discussion.
Is manufacturing such a challenge that we are afraid to tackle or talk about the issues or we don't want to talk about them as they will reflect our shortcomings? I don't believe so. Chemists and chemical engineers have shown through example what all is possible. We have met the toughest challenges.
Only reason and rationale I can imply for living with “quality by aggravation” is that the work culture in a pharmaceutical organization is not conducive to incorporate the best practices. Why? Is it because companies are in a hurry to get the product to the market and the general belief is that once the product has been commercialized we cannot change the process? If this is the general consensus, then we are mistaken. There may be others reasons that I am not familiar with.
FDA’s clause 21CFR314.70 does permit the process of continuous improvement after the process is commercial. However, companies improving their processes have to assure that the product performance has not changed. Reading the regulation one can see that FDA has created significant red tape and hurdles for the companies to embark continuous improvements.
All said and done companies still have to take the lead (be the driver) to commercialize the best processes and practice continuous improvement. FDA and other regulatory bodies have to take out the hurdles that come in the way for the companies to practice fundamentals of chemistry and engineering to produce quality products i.e. eliminate quality by aggravation.
Until companies take the lead and regulatory bodies facilitate the process, we will be talking QbA in 2025 or even later. Companies have to be held responsible for quality. Penalties for distribution of less than approved quality products have to be severe. Laws might have to be changed so that companies do not hide behind the legal system. Till the regulated take the lead the regulators will drive their life.
I re-emphasize that companies create the manufacturing processes and should be the driver/owner to deliver the best product. If they don't, regulators will muddle and best quality will not be produced at optimum cost.
Girish Malhotra, PE
Thursday, November 19, 2015
FDA rule CFR314.70 is an interesting rule. I believe if the pharmaceutical industry wants to produce quality drugs with minimal or no in-process testing, this rule has to change. I have presented my perspective (1,2,3).
This rule is of significant value as it can improve profitability, expand the patient base by making drugs affordable and get the companies out of the rut of repeated analysis of samples all along the manufacturing processes. However, the rule needs to be simplified.
If done and implemented commercial processes can be improved and best of the chemical engineering and chemistry practices be incorporated during the patent life of the branded products and also for generic products. “Continuous improvement” would become part of the pharma lifestyle. Fundamentals of engineering and science will lead development and commercialization of excellent processes. They will produce quality products. Science would make glorified acronyms (QbA, PAT and QbD) history.
Rule as it exists suggests that companies can change the approved processes but have to share with the regulators everything like what, how, when and where the improvements will be done. This, I would call is regulatory interference and is a deterrent. This I call is “shackled freedom”, companies can innovate but the regulatory red tape becomes bottleneck for innovation. Most likely in the current scenario companies would not do any process improvements. Companies do not have any incentive to improve their practices as profits and their customer base (who-so-ever can afford) are assured even with inefficient processes/methods. Patient will pay to extend life.
For “continuous improvements” and manufacturing technology innovation companies need complete freedom. My recommendation to the rule makers is that the companies be allowed to do so with the stipulation that the produced product has to meet efficacy and performance of the already approved product i.e. bioequivalence has to be assured and demonstrated if desired by the regulators. A trust has to be built between the companies and regulators.
For regulators to give away the suggested freedom to the companies would be like giving away their kingdom, a difficult choice. Since quality of the drugs is paramount, companies will have to give something also to the regulators and that would be if the product quality is not met, the producing operation is shut down, no questions asked. Legal interference could create issues for this give and take.
Who will win?
If suggested is adopted process of “continuous improvement” will set in and it could lead to much needed competition in pharma. Winners will be patients (through affordable drugs) and companies with higher profits (through better technologies). Regulators will regulate. I believe carrot and stick approach will help us all win. Pharma will be able to capitalize on an unprecedented opportunity that has never been offered to any industry i.e. increase their customer base by as much as billion or more. It will be a win-win.
Girish Malhotra, PE
Malhotra, Girish: Calling for change:
Process of Continuous Improvement and Pharmaceuticals:Malhotra, Girish:
3. Impact of 21CFR 314.70 on The Life of a Pharmaceutical Manufacturing Process: http://pharmachemicalscoatings.blogspot.com/2015/08/impact-of-21cfr-314670-on-life-of.html
Tuesday, November 17, 2015
My perspective for Pharmaceutical Manufacturing Technologies/Processes and Continuous Improvements
Regulations are necessary for quality assurance of drugs. FDA established 21CFR314.70 (1,2) and it is a very important rule. It assures that there is no “by manufacturer’s choice” deviation from the manufacturing methods and practices that have been filed for the components involved in the manufacture of any salable drug – the active pharmaceutical ingredient (API) and their formulation – and labeling, packaging etc. Every change has to be reported. Drastic process changes are discouraged.
When there is a discussion about pharmaceutical manufacturing generally only formulations are considered. API manufacturing is ignored and it should not be. Without API there is no drug. 21 CFR314.70 encourages “continuous improvements” in the processes that will create the best product for clinical trials and that’s the way it should be. However, in my estimation under the current rules all of this has to be done prior to going to clinical trials. QbD (quality by design) becomes a natural part of the process development before a process is commercialized. After the fact process change is difficult.
Generally, most APIs and their formulations are produced using batch processes. Existing approved products require annual reporting of improvements/changes. Most of the changes are minor. However, if the processes are to be revamped for process yield, operating parameters and manufacturing methods, they are going to be the biggest challenge as the efficacy of the API and its formulations, especially prescription drugs could change. In my estimation re-approval would be needed. This can be a monumental task, even for over the counter drugs (OTC) not requiring prescriptions, because new monographs may have to be established. Money and time investment would be necessary. Such changes are major “continuous improvements” and deterrent for prescription drugs.
Continuous manufacturing for API and their formulations is pharma’s new and least understood buzzword. In the annals of chemical engineering and for that matter in any industry “continuous manufacturing” means 24x7x50 hours of operation per year with pre-established down time. There are few selected APIs (OTC or prescription) that can be converted to continuous processes (3, 4, 5).
Totally different operational thinking/models would be required. The use of existing manufacturing equipment and technologies is very feasible.
Continuous processes for formulations should have been commercialized over sixty years ago.
Manufacturing technologies and equipment along with knowledge base for such processes have existed since, but not incorporated. This is due to traditions of business and lack of application of chemical engineering knowledge base to commercialize such processes.
Benefits and Challenges of Continuous Improvement
Benefits of cost reduction, improved profits and larger customer base due to improved manufacturing technologies are huge and well documented. Best of the process technologies have to be created before clinical trials. As we know “after the fact” improvements, under the current regulatory environment, would not happen due to the financial and time elements discussed above.
Only a “maverick company or creative destructionist” can take on the task. Success would completely change the pharma landscape. I am not sure if pharma related components and that includes companies, legislature, vested interest groups, are ready for such an evolution.
There will be microscopic examination and doubts raised, forcing many delays even if the companies do the “right” things based on excellent science and engineering.
I would propose the following. I am sure there will be plenty of scrutiny and naysayers – unless we take bold steps not much changes. If there are alternate better ideas, let us discuss those also. I propose that the pharmaceutical industry be allowed to commercialize process improvements (yield, process/operating conditions, operating parameters, cycle time) in the manufacture of approved APIs and their formulations.
The manufacturing company will guarantee that the product efficacy and performance, along with impurities, will be better than the approved product produced by the company. There would be an added stipulation that if for any reason product performance, efficacy, labeling and impurities do not meet or are worse off from the approved product, company proposing improvements will be barred from making the product using alternate process for the next e.g. two or three years. If they do decide to use the alternate process, they will have to go through the re-approval process. Minor changes that do not change the current filed processing methods etc. would be excluded. This would apply to OTC, brand and generic products also.
I propose that the pharmaceutical industry be allowed to commercialize process improvements in the manufacture of approved APIs and their formulations – without re-approval
Unless bold steps are considered, very little will change in the current pharma’s manufacturing methodologies or anywhere, for that matter
I admit that my proposal is a bit bold but unless such bold steps are considered, very little will change in the current pharma’s manufacturing methodologies or anywhere, for that matter. If incorporated in pharmaceutical manufacturing landscape, continuous improvements and innovation could become a routine and it could be extended to the whole healthcare industry. Wright Brothers did and so was the adventure of sending humans to moon and bringing them back. A successful trek to Pluto would also fit the category. It is time for the pharma industry to be bold. It has an opportunity to add as much as 20% of the global population (~1.4 billion) to its customer base, an unprecedented opportunity for any industry on the planet. Profits will improve and healthcare costs can come done. It would be a win-win.
This was presented at CPhI Madrid October 2015.
1. CFR - Code of Federal Regulations Title 21
2. Malhotra, Girish: Impact of 21CFR 314.70 on The Life of a
Pharmaceutical Manufacturing Process, Profitability through Simplicity, http://pharmachemicalscoatings.blogspot.com/2015/08/impact-of-21cfr-314670-on-life-of.html
3. Malhotra, Girish: Why Fitting a Square Plug in a Round hole is Profitable for Pharma and Most Likely Will Stay? Profitability through Simplicity, http://pharmachemicalscoatings.blogspot.com/2014/08/why-fitting-square-plug-in-round-hole.html
4. Malhotra, Girish: A Blueprint for Improved Pharma Competitiveness, Contract Pharma, Vol. 16, 7, Pg. 46-49, September 2014,
5. Malhotra, Girish: Continuous Process in Pharmaceutical Manufacturing: Considerations, Nuances and Challenges, Contact Pharma, June 2, 2015,