Disclaimer

All opinions are my own.

Sunday, December 23, 2007

Challenges to Ethical and Generic Drug producers

If the current scenario of “drying of the blockbuster pipeline” and Generics increasing their market share holds, we could see most of the API manufacture, formulation and clinical testing moving to low cost countries. Since “Laws of Economics” prevail, this could be considered inevitable. Ethical and Generic companies have to develop and implement strategies that could give them competitive edge and allow them to move forward on their chosen path. Since Ethical and Generic producers are adversaries, it would be interesting to see the playing out of respective strategies. It is a real Chess game.

Ethical Pharmaceuticals:

Major pharmaceuticals have developed and commercialized blockbuster drugs. However, they have not retained these drugs in their portfolio after the patents expire, as they have been busy developing new drugs. Producing “patent expired” drugs has not been part of their strategy.

Due to high profit margins, Generics have taken over the patent expired drugs and have lately made every effort to take over the patented drugs through litigation. With aggressive entry of Generic producers from Israel, Iceland, and India, the turbulence in the pharma field has dramatically increased.

With the drying of blockbuster pipeline, escalating clinical trial costs, and relentless pressure of Generics to capture the market, Ethical drugs producers are trying to implement strategies to reduce their costs and retain their stronghold on the drug development chain. Some of the strategies being implemented are as follows:

  • Outsource drug development·
  • Outsource active pharma ingredients (API) manufacture and formulations
  • Synergize small molecules and/or biotech combinations
  • Acquire small biotech developers
  • Whatever else works i.e. collaborations

Some of these strategies might work as a short term fix to retain profits. However, the long-term impact of these strategies is going to be significant. The biggest consequence is going to be the shift, disappearance, and/or reduction of knowledge base from “Major Pharma” companies to the outsourced companies. Since the “outsourced companies” are in low cost countries, they have dual benefit of the above relationships. It makes them intellectually and financially stronger to become formidable generic competitors. We are beginning to see the happenings of this.

Generic Pharmaceuticals:

Generic pharmaceuticals are enjoying what I will call best of all worlds. They are basking in an unprecedented growth. I do not believe any of the financial analysts and pundits would have predicted this in the beginning of 2005.

Customers would like to have drugs at lower prices. Generics are able to fulfill this need in every market as a result the demand for generic drugs has increased. This surge has increased generic business dramatically in the recent years.

They have used these profits to grow organically and acquire sites that are being shed by API producers and formulators at significantly low costs. They have also been beneficiary of technology and intellectual property that comes with these acquisitions.

Strategies (1) being implemented by the Generic companies are unconventional and this is causing additional turmoil in the Pharma field.

Future and strategies:

Pharmaceutical companies have achieved handsome profit margins by inventing new drugs and by producing generics. Customers have paid for every inefficiency in the development, clinical testing, manufacturing, and supply chain. Since the pharma companies have been able to make respectable profits, they never saw a burning need to minimize costs of each step. Everyone has been comfortable in their respective arenas. However, the drying of the blockbuster pipeline and Generics trying to encroach on the playing field of Ethical companies is changing the market dynamics.

The price we pay for the drugs in US and some other countries are not market driven but driven by what the market can bear. Many consider these prices high and are getting low cost drugs every way they can e.g. Canada, Mexico, imports, and/or Internet. This has led to considerable debate and discussions as healthcare costs increase. Wal-Mart and few other companies are offering drugs at low price. This puts pressure on the companies in the supply chain to make an effort to continuously lower their costs. Companies will have to consider and implement new strategies.

If the major pharma companies are not able to develop new blockbuster or biotech drugs, they could start making generic drugs. This could lead to consolidation and formation of “Mega” companies. My definition of “mega” merger is combination of an Ethical and Generic company to be players in both markets. These mega companies not only will develop new drugs but they also will have to make every effort to retain the patent expired drugs as part of their portfolio. If this happens, every step of the supply chain (especially manufacturing technologies) would be critically evaluated and methods implemented to reduce costs. The business model of mega companies could be a combination of market and consumer driven companies trying to maximize their market share. This should reduce global healthcare costs.

Government of India (2) has announced an innovative drug discovery program combining global IT firms (Sun Microsystems), researchers (Royal Society of UK, Imperial College of London, Medicine Sans Frontiers etc.), companies, and young minds at India’s scientific laboratories to invent drugs at a fraction of the cost of a multi national company (MNC) developed drug. An open platform of drug research like Linux development is an interesting and innovative concept and path. Success here would genericize and commoditize pharmaceuticals and add additional pressures on pharma companies to implement technology improvements to reduce costs. Other business models will emerge and it would be interesting. I expect that better than 50% of the pharmaceutical market would be a commodity market in the next five years and we will see prices drop.

(1) Generic Antidepressant May Affect Wyeth http://www.forbes.com/feeds/ap/2007/12/20/ap4461011.html?partner=alerts accessed Dec 20, 2007

(2) Govt to rope in young minds to invent cheaper drugs http://economictimes.indiatimes.com/News/News_By_Industry/Healthcare__Biotech/Govt_to_rope_in_young_minds_to_invent_cheaper_drugs/articleshow/2635842.cms accessed Dec 20, 2007

Girish Malhotra

Tuesday, December 11, 2007

Year 2007 in Pharmaceuticals

Year 2007 might be remembered as an eventful year for the Pharmaceutical industry. I have not kept a tally but the number of layoffs and plant closures are significant. I do not believe anyone would have thought about this five years ago.

Pharma industry has had a myopic vision. They have believed in that the pipeline will always be full and the “generics” will live on crumbs. It never invested in upgrading manufacturing technologies. Simpler technologies could have prevented generics from taking over the crumbs. Crumbs are now becoming stronger, boulder and they will haunt the majors.

Unfortunately, the pipeline is sputtering and has leaks. Now the majors do not know what to do. The world needs cheaper medicines to live and generics can fill the need.

Jacob Schumpeter of Harvard said that industries go through “creative destruction” and it is a necessary part of the progress. Is the Pharma heading that way?

Girish Malhotra

Monday, November 19, 2007

Things we know about drug prices but are afraid to ask.

Recently an article presented a perspective titled “Cost per day/Cost per kilogram: What’s the right price for an API? That depends whether you see things like a pharma company – or like a CMO.”

This article illustrates why the drug prices are high. Drugs are competitively priced with similar molecules. I do not believe anyone has asked the customer what can she/he pay or should pay. Customer wants to live and she/he is going to pay whatever is the demanded price.

Due to large price differences of medicines in US and many other countries, people explored alternate sources for their medicines. Internet made that easier. This led to import of drugs that could also be counterfeit and illicit. Hopefully, Wal-Mart’s offer of $4.00 for a month’s supply generics will reduce these imports and counterfeits.

The referenced article suggests that the Wal-Mart’s prices are lower due to shorter supply chain. Is Wal-Mart not making any “enough” money? I believe they are making their targeted profit margin, as their goal is to make money for their shareholders.

Wal-Mart has done its homework at $4.00 price level. It might be worth looking at the price of formulated drug. The following is an illustrative case and has no similarity to any drug.

I have assumed an active (API) cost price is $50.00 per kilo. It is also assumed that the combined cost of excipients is $25.00 per kilo. The API to excipient ratio in the tablet is 1 to 9. Based on these assumptions, component cost of API and excipient for a 100-milligram tablet is 0.5 cent and 2.25 cents respectively. I have assumed that the cost to formulate and package is 2 cents per tablet. This brings the total cost of finished tablet to 4.75 cents.

At $4.00 for a 30-day supply, per tablet price to the customer is 13.33 cents. Thus, there is a profit margin of 8.58 cents (about ~60%) per tablet between the formulator, distributor, and Wal-Mart. 8.58 cents might look a small number but when you sell millions of tablets, dollars add up.

Cost of the API is about 3.75% of the Wal-Mart selling price. It is a low number. The API producer has made their desired profit margin. If Wal-Mart, CVS, Target, Walgreens, and other major drug sellers along with the API producer want to increase further their margin, they can do that by having the API supplier and the formulator to reduce their costs by implementing improved manufacturing technologies. In addition to improving their margin, the API producer and formulator will have fewer toxins to treat for safe waste disposal i.e. reduced cost and will also reduce environmental impact. Besides making higher profit though innovation, we have an obligation to “our planet earth.” We have to do our best to preserve its serenity and grandeur. We owe this to ourselves and for the generations to come. Thus, technology innovation is necessary.

It is conjectured that the cost of API component of a tablet is small compared to the selling price and for that reason; there is no incentive to develop and implement better technologies. This to me is a morbid thinking. It is like saying why improve our business practices if the business can make significant money because the customer would pay sellers price as she/he want to live. Complacency and lack of desire to improve invites competition and we are seeing that in the Pharma world.

Girish Malhotra

Thursday, November 15, 2007

Environmentalism, Technology and Human Life

Environmental conservation became a way of life in early seventies. Every manufacturing industry had to comply with appropriate effluent standards. Conservation technologies were developed and implemented to meet necessary regulations. Chemical industry used either of the following options to comply with the regulations.
  • Improve processes to maximize conversion of the raw materials to finished goods so that the waste treatment load is minimized.
  • Develop and use technologies to treat and dispose the unconverted raw materials and intermediates.

Commodity, specialty, and fine chemicals, due to their competitive pressures maximized their efforts to improve the raw material conversion and relied on option #1. However, the Brahmin cousins of chemicals “pharmaceuticals,” who have a disease curing and life extension value due to their toxicity to bacteria have mostly relied on the second option. This has been possible as pharmaceuticals have been able to achieve their profit margins due to relatively low competitive pressures and their ability to charge their demanded price. Customers have paid for the low conversion of raw materials in useful products as well as disposal of the undesirable reaction byproducts.

Since 2005, the global pharmaceutical playing field has suddenly seen many players challenging their big brothers. With about $100 billion dollars of ethical drugs coming off-patents and pressure from their generic brethren, major players are under considerable pressure to meet stock market and shareholder expectations. Lack of blockbuster drugs in the pipeline is also adding to their woes.

Brahmins who until recently were “untouchables” have become vulnerable and are scrambling to retain their profit margins. It is surprising that they are following the same road that has been unsuccessfully travelled by many in the chemical and other industries. Recently we have seen layoffs, plant closures and they are accelerating. Research is moving offshore. I guess the Brahmins are no longer the “untouchables.”

Short term with the current strategy the Pharmaceuticals might be able to retain their profits. However, there is a downside and it is disappearance of the knowledge base while the generics becoming stronger competitors. Generics are taking advantage of this situation and expanding as they have a growing customer base, (almost everyone in the world wants lower cost drugs).

Is there a way out of this dilemma? There is and it is through manufacturing technology improvements. Companies need to develop processes where they do not have a double jeopardy, which they currently have. Double jeopardy is low raw material conversion to finished goods and then spending monies to convert the toxic materials to products, which can be properly and safely disposed to meet the necessary environmental regulations.

Pharmaceutical manufacturing plants may meet the established environmental standards but the small percentage of chemicals in the effluent could still be toxic to the plant and aquatic life. Thus to prevent damage to the life, pharmaceutical companies might have to meet an “ecotoxic” standard.

Ecotoxic definitions and control limits would have to be developed for most of the pharma raw materials, their intermediates, and actives. This can be a prolonged and expensive process. This will be resisted by the industry. It is difficult to conjecture the implementation costs but would be high. All this could raise costs and potentially make drugs more expensive.

Is there a choice and can we reduce the cost of drugs rather than raising them to achieve a certain eco-balance? Life extension also becomes a part of the economic equation. These issues can be discussed and I am not sure of the “correct” answer. However, while all this is debated, the pharmaceuticals will still be needed. Is there an economic interim solution? There is, and it is “need to improve the active pharmaceutical manufacturing and formulation processes.” Some could say that in the overall scheme of things, such an exercise is not worth the effort. Such efforts will not only reduce pharma costs but will also reduce the toxic load on the effluent wastewater treatment and soil. And finally, if some one says or believes that in total scheme of things technology improvement and cost reductions are not important and they have “NO” impact on our planet’s environment, then we need to think about the legacy we will leave behind for the next generation and the generations to come.

Girish Malhotra

Saturday, November 3, 2007

What is India?

I just returned from India and the changes I see in the last 18 months are enormous. It begs a question "What is India?"

India
is a complex mix of every imaginable culture, color, creed, religion, caste, and social structure. In 2007, India celebrated its 60th Independence anniversary. This is a milestone but I do not look at India as a 60 year old but a 16-year-old youngster who has a “can-do” attitude. Why the 16 year old?

Even though India became independent in 1947, it was shackled by its stringent policies, which suppressed economic growth and bread every ailment that goes with it. In 1991, by stroke of crisis, luck, quirk, and/or their combination, then Prime Minister Mr. P. V. Narasimha Rao changed the course of India on advice of the current Prime Minister, Dr. Manmohan Singh, Finance Minister P. Chidambaram and others. Thus, a sixteen year.

Any visitor can be awed by India when they land at any of its gateway airports. Traffic, people, vehicles, and chaos at any road intersection overwhelm many visitors from “the developed countries.” For some strange reason this chaos teaches India tolerance and desire to get ahead. This chaos also lets an Indian look at multiple scenarios simultaneously and come up with a solution.

I look at India as a runaway train with its 20-40 year old having a time of their life. This is evident by their totally blue-sky goals and objectives. Can they make it?

My answer is yes. Majority of the 16 year old grow up to be a fine young person. They do stumble but with societal support, they quickly recover, grow stronger, and move forward. This is how I see India.

Star date 2025 will give us an interesting picture.
Signs are there.

India's stock exchange index has gone from 10, 000 to 20,000 in twenty months. Bill Gates used to be the richest person on the planet. Last week Mr. Mukesh Ambani became Numero Uno.

Girish Malhotra

Monday, October 29, 2007

Purchase Power Parity

In the globalized world “purchase power parity” is a necessary and an important consideration. However, this is never discussed in most of the printed news.

Reasons for this consideration are very simple. Except for few financially savvy individuals, majority does not understand it. People convert one currency into other, look at the absolute number, and compare them. This is especially true when British pound, dollar, Euro, or other currencies are converted to currencies of supposedly low cost countries.

Normally Press converts the foreign currency to the currency of their readership. Since the readers are not familiar with the purchase power of one currency to the other, reader gets the impression that the people are living in poverty or living like kings. The disparity between the absolute numbers is the reason why the jobs are going to low wage countries.

An example will illustrate the point. In India, a five pack of chewing gum costs about Rs. 5. In US, the same five pack costs about $0.80. At the rounded exchange rate of $1.00 = Rs. 40.00, one can buy about eight five packs for Rs. 40.00 in India. This clearly states that the buying power of the Indian rupee is higher than the buying power of dollar. McKinsey & Co. in its one of its report suggests the purchase power parity of Indian rupee to US dollar to be about 8.5.

Thus, it is relevant that the wages etc be compared on apple-to-apple basis rather than apple to tomato basis, since both happen to be round objects.

“Purchase power parity” can be offset by innovation.

Girish Malhotra

Saturday, October 27, 2007

Downsizing

The news of layoffs at pharma companies had been unheard off and were unimaginable. Reasons were simple. Companies made profits, as there was no realistic competition. Generics from India have changed the playing field. The status quo does not exist anymore. Drugs are being commoditized and profits are going to shrink. In addition, the blockbuster model is not working.

This is history repeating itself. We saw this in chemicals, textiles, steel etc. in the developed countries. Toyota changed the playing field and US automobile companies did not react. Did anyone ever imagine GM would seize to the largest auto company? Globalization is bringing new intellectual capital to every aspect. This has resulted in some improvements in manufacturing processes and technologies in every aspect of business in the companies from India. This is not being the case at companies in the developed countries. With the layoffs, the knowledge base will start disappearing.

Established companies have followed the practice of closing plants, reducing R&D and outsourcing everything they can. These are short-term gains to appease the stock markets. Cumulative effect of layoffs is demoralizing on the work force. Why would some one want to put their heart and soul in innovation if he/she might not have a job? Humans pride in innovation. If that road is closed, humans stop putting their best and in the long run, the knowledge base is lost. Recent announcements at major pharma companies are just the start of reduction in knowledge base and intellectual capital.

There may be still opportunities. This is through simplification of the manufacturing technologies and processes, the heart of any manufacturing company. We need to revive the heart before it totally fails. This can only happen if the chemistry, physics and engineering of a chemical reaction and formulation is properly understood and accordingly commercialized. This has not been the case. USFDA clearly states that the current practices are antiquated.

Companies have to step out the box and use every possible resource (inside or outside) to re-invigorate the manufacturing and R&D of their companies. This is necessary to stop the downward spiral.

It is well known in the specialty chemicals businesses that the yield and the on-stream-time have to be high for any business to survive. In pharmaceuticals (specialty chemicals with disease curing value) the yield of active ingredients are low. I have seen yields as low as 5% and “on-stream time” is less than 50%. Yes, one can charge high price for the drug to cover up for inefficiencies and lack of innovation for some time. However, this cannot last forever. One has to improve the processes to reduce overall business costs. If this is not done, history will repeat itself and we are beginning to see this in pharmaceuticals. Is it too late? Again, the answer is NO. Pharma companies need to put an effort to improve manufacturing and process technologies and that is the only way companies will survive.

Girish Malhotra

Wednesday, October 24, 2007

India's contribution to humanity

Few years ago Pharma companies in India genericizeddrugs for AIDS. Many thought it was a bad business decision. However, others thought this was service to humanity. Many of India’s pharma entrepreneurs have been able to profit and service humanity.

In US, there has been a squabble about use of the stem cell. Others are using the stem cell therapy to serve humanity. Fortune magazine’s October 24, 2007 issue covers the use of stem cell to restore “eye sight.”

This is “WOW” contribution. Interestingly the stem cell procedure for eyes is being done at Hyderabad, an IT hub of India.

Is IT a Catalyst for India’s Drug Industry? http://www.pharmamanufacturing.com/articles/2007/155.html

gives us additional clues.
Girish

Saturday, October 13, 2007

Pharmaceutical buzzwords

In the last few years we have been reading about PAT (Process analytical technology), QBD (Quality by design), Kaizen and Six Sigma etc. Kaizen and Six Sigma can improve the development of a process and improve an existing commercial operation. PAT and QBD are not magic wands. In addition, PAT and QBD do not happen by themselves. Their deliver value only after we understand the process before it is commercialized. This can only happen if we follow the following road map and make an effort to get there.

1. If we do not have a thorough knowledge of the chemistry, kinetics, economics and do not know how to translate a lab process to commercial scale, we are not going to able to apply principles of chemical engineering to design an economic process that is going to give us quality product. We will be stuck in post analysis and fixing mode, the current mode of API manufacture.

2. If we have more than one solvent in the process, we have to go back to the lab and justify why. More than one solvent means we need separate storage tanks, recovery and disposal methods. All of these cost money.

3. I do believe that IR, HPLC, Spectroscopy etc. are an excellent process development tools. However, if we use them to monitor the reaction progress and completion of each step, it does not sit well with me. I consider this an expensive way to cover what we did not do “right” from the start. Application of these exotic tools forces us to have a process where we have to analyze the intermediate product to make sure we have the proper compound of desired purity and yield. This is a batch process and capital investment increases. The total business process slows down as the cycle time from raw material to finished product increases. We have to implement methods that reduce the testing time i.e. the resulting cycle time.

4. If the process has multiple steps and the overall yield is anything less than 85%, (I can already hear in the background: is he dreaming?) the process is inefficient. OK 85% may be asking too much, can we settle for 70-75%? We have to figure out how to get to higher yields. Recently I was reading a patent that had an eight-step process. The yield was less than 5%. I come from “old school” where I was taught high yield means less pollution and more money in the bank. I hope when this company commercializes their process, they would have figured out how to get a better yield.

5. Process control technologies that can control the reaction, flow, and stoichiometry exist. I equate our current development and subsequent commercialization processes to “a car running us” rather than “we running the car.” Wouldn’t it be nice if we have developed a process that we can control?

6. Low process yield means that the unconverted raw materials are going in the effluent that has to be treated to meet the effluent water quality standards. Unconverted raw materials have to be disposed in a safe manner. We are loosing money two ways. a) lost raw materials, b) money to dispose them. Thus, it is in our interest to maximize the conversion yields.

I am not criticizing the existing processes or the processes that are in the pipeline. We have to attempt to have the best possible process from the very beginning of the process development. Again, to achieve the highest value from a process we have to have a complete and through understanding of the chemistry and appropriate unit operations, we are developing and want to commercialize.

It is well know that the pharmaceutical processes (glorified specialty chemical) have less than 40% on-stream time. This is poor. A process developed with the above road map when commercialized will have much higher equipment utilization time and should produce quality product requiring minimum in-process analysis.

GM

Wednesday, October 10, 2007

API (active pharmaceutical ingredient) and specialty chemical costs

Recently there have been write-ups about a significant percentage of API are coming from China and India. These beg a question: Are the Pharma companies importing APIs from non-cGMP complaint companies? The answer is NO.

In 2006, SOCMA (Society of Organic Chemical Manufacturers Association) and EFCG (European Fine Chemicals Group) issued a joint position saying that some countries are “not playing according to rules”. “Patient safety and national security compromise” was the theme of this position paper. This seems to be challenging the very foundations of the buying pharma companies. It is indirectly saying that the Pharma companies are not caring of patient safety and national security. I do not believe that the Pharma companies are going to put anyone in jeopardy intentionally. In addition, India has the highest number of FDA approved facilities outside US. China is striving to get there. If the imported API and the drugs being sold do not meet the regulatory standards, the reputation and credibility of the pharma companies will be lost in an instant. They cannot afford such en event. Unscrupulous business people are always going to be there. We have to stay away from them.

Since the Chinese and Indians are not going to go away, EFCG at the Milan CPhI October 2007 meeting reversed its position. “We are not anti-Asia.”

API are being imported as they meet the desired quality standards and their costs are lower than the comparable product being made in the developed countries. Combination of better technology, lower investment and lower labor cost influence cost and quality. We know this but we should review it again.

If the process technology used by the companies in India and China is simpler than the technology used by the API manufacturers in the industrialized world, then the companies in the developed countries have an opportunity to improve their technology. Simpler technology also means lower investment. Many a times the intermediate products in the synthesis of an API are analyzed before the next step. This is “analysis paralysis.” Technology should be such that the intermediate testing can be minimized. This will reduce cycle time i.e. improve productivity and lower costs. If testing has to be done, the test methods have to be the simplest. Exotic equipment needs high-powered personnel and that adds cost.

With respect to labor costs, they are lower in China and India when compared on a dollar to dollar (converting local currency to dollars) basis. However, this is not the correct comparison, as it does not give a realistic picture. Indian wages are lower but they have a higher buying power. A family of four in US earning poverty level wage is about $20,000 per year ($1666.67 per month). The same dollars converted to the Indian currency translates to about salary of Rupees 66,650 per month. This money could allow the family in India to have a full time house help and a chauffer. Very few can afford such a life style in the developed countries. Another case in point, in US, we pay about one dollar for five sticks of chewing gum. One would pay less than 15 cents for the same five sticks in India.

Since the playing field has changed, the only choice for the companies in the developed countries is to achieve and/or beat the costs from China and India. This can only be done through innovation of process development methods, technologies, and manufacturing practices. We have to simplify (Profitability through simplicity) and remove the redundancies. A new reality is there and we have no choice. It is a “do or die” situation.

Companies in India have to improve their technologies also as China is coming in with lower raw material and labor costs.

GM

Friday, October 5, 2007

Pharmaceuticals

Every pharmaceutical we take has an active pharmaceutical ingredient (API) that is formulated with inert excipients to facilitate dispensation. Significant attention has been given to the formulation manufacturing processes. In the formulation process, the intent is to make sure that the active ingredient is uniformly distributed in the pill or capsule when they are produced. I am sure everyone knows why we have 1 mg (milligram) pill of a certain drug but it looks much bigger. Inert excipients are used to facilitate dispensing. If this was not done, it will be difficult to consume as many of the APIs have bad/poor taste and we could loose the small quantity.

Since a lot of process development work has been done on the formulation, I will skip it and focus on API manufacture. API come in two forms, free flowing solid or liquid. Solids are produced mostly through crystallization, spray drying or grinding and drying of the API. These unit operations can be batch or continuous and are well covered in any chemical engineering curriculum.

Majority of API are organic compounds. Every API is a specialty chemical that has a disease curing and life prolonging value. Thus, the manufacturing practices and philosophies applied for the specialty or fine chemicals can and should be applied to the chemicals that cure disease. Since API cures a disease, this means they are toxic and kill bacteria that make humans as well as animals sick.

Most of the times an API manufacturing process are a batch process. Many a times the commercial process is a scale up of how the process was developed in the lab. The purity after each step is analyzed by high-powered analytical instruments and then the next step is carried out. This is a “risk-averse” approach and can be called “quality by analysis.” We are and should be thankful to the approach, as we have had safe drugs. We cannot imagine not checking quality of the drugs. We do not want fiascos similar to the recent animal feed and lead paint on toys. Nevertheless, I call our current pharma methods “belt, suspenders and harness” approach. This approach has big financial implications on a company. Physical structure and equipment investment, raw material, work-in-process and finished goods inventories go up.

We have not applied the best scientific and engineering methods, principles, and practices we taught the world and have practiced in the manufacture of specialty/fine chemicals to the pharmaceutical manufacturing. USFDA in one of its reports suggests the current manufacturing practices are “inefficient and costly.” they are being polite. Regulatory agencies would like the industry to move from “quality by analysis” to “quality by design” but it takes more than words. Regulatory agencies cannot dictate any company how to manufacture their products.

USFDA in its cGMP guidelines has no mention of “continuous processes.” The word “continuous” does not exist in any of their approved guidelines. Pharmaceutical manufacturing chemists and engineers have two challenges: 1) improve their existing processes 2) figure out how to convert their laboratory developments to a continuous process.

Continuous processes are not “voodoo science.” They are based on sound scientific and engineering principles. They deliver consistent quality product “quality by design” (QBD) and are economic. Continuous process also means continuously converting a starting raw material to an API and then formulating the API to produce a dispensable medicine.

GM

Thursday, October 4, 2007

Welcome

Welcome to my blog.

My intent is to write down my experiences and observations as they relate to manufacturing, technology practices and strategy of Pharmaceutical, Chemical and Coating companies.

I will share my experiences in these areas. You are welcome to ask a question and comment on my observations.

With globalization , the world has changed and internet has accelerated this change. It has become 24/7 world. Things happen and they impact the landscape.