Disclaimer

All opinions are my own.

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

No comments: