Drugs for Infectious Diseases, Funding and Opportunity

Spread of infectious diseases such as HIV/AIDS, malaria, schistosomiasis, and tuberculosis are cause of a global concern. Pharmaceutical companies have and continue to develop and market drugs that are effective for their cure. Patients in the developed countries have been able to use their respective healthcare systems for their needs. However, similar healthcare systems are not available in the developing and underdeveloped countries. The number of patients in these countries is very large. Patients are not able to afford these drugs (1). Governments in these countries do not have the funding to educate and distribute the necessary medicines to cure and control their spread.

Many governments [notably US], NGOs, organizations and foundations [prominent among them are Clinton Foundation and Bill and Malinda Gates Foundation] through financial contributions are making significant effort for the cure and control of these diseases. This is being done through education and distribution of drugs.

Prices of the new medicines are set at a level and specifically designed for patients in the developed countries that have healthcare programs. Many patients in the developing and economically stressed countries cannot afford these drugs. Governments and companies in India, China and other countries are using compulsory/voluntary licensing along with emergency declaration to manufacture some of these drugs to fulfill the needs. The prices of the drugs in these countries are significantly lower compared to the prices in the developed countries but still can be high for these economies.

Every effort is being made to make a dent in the spread of these diseases. President Clinton (2) recently suggested use of emergency criterion even to distribute these drugs in the developed countries. With the current global financial crunch, funding is strained but the needs persist. There could be a financial shortfall also.

Mileage of the existing funds can be extended is by improving the process yields and manufacturing technologies of the active pharmaceutical ingredients and their formulations. Yields of the existing chemistries can be improved through their review and review of their manufacturing practices. Chemical process yield of many active pharmaceutical ingredients is less than 66%. There are many products in this category. Low yields are cost improvement opportunities.

Efforts to improve Tenofovir (part of the AIDS drug cocktail) conversion yield (3) have had good results. Its yield was improved from 13% to 24%. This has resulted in lowering the yearly cost to less than $90.00 per year. However, there are significant opportunities if the yield can be doubled to 48% or higher. Better execution of the process chemistries can also reduce the costs. Savings will improve the mileage of the contributed monies.

Based on published information yearly need for Praziquantel (4) (for schistosomiasis) is around 500,000 pounds per year and about one million pounds for Tenofovir (5) (for AIDS). Multiple plants are producing these products. Since the cumulative quantities are being produced at many sites, value of economies of scale and better technology are diluted. A consolidation opportunity exists.

Consolidation will force best of the chemistries to be used at few plants that will have best of the manufacturing technologies. Production costs will come down. Profits for the companies that will be producing them can be better than they are today.

Improved manufacturing methods can enhance productivity and reduce process cycle time i.e. improve asset utilization. This can be achieved at no or minimal cost. Improved productivity can result in better manufacturing technologies through economies of scale. Process sustainability can also be improved. All or part of the cost reductions can be passed on and funding monies will extend their mileage. There could be left over philanthropic dollars that could be used for other worthy causes.

Thought of external process and technology review and continuous process improvements does not prevail in pharmaceuticals manufacturing. Every inefficiency cost is passed on. If one or two companies break out of the pack and they will change the landscape for the whole pharmaceutical industry. Supply chain issues could be addressed and resolved. That would be a win-win for all.


Girish Malhotra, PE
EPCOT International

1)Drug Prices: Food vs. Medicine- A Difficult Choice for Some
2)http://www.washingtonpost.com/national/health-science/obama-proposes-helping-more-people-get-access-to-aids-drugs/2011/12/01/gIQAxa5qHO_story.html
2)Ripin etal, Process Improvements for the Manufacture of Tenofovir Disoproxil Fumarate at Commercial Scale, Organic Process Research & Development, 2010, 1194-1201
3)WHO publication WHO/SCHIST0/89.102 Rev. l
4)Francoise Renaud-Théry and others, Utilization Patterns and Projected Demand of Antiretroviral Drugs in Low- and Middle-Income Countries AIDS Research and Treatment, Volume 2011, Article ID 749041, 8 pages doi:10.1155/2011/749041

Does the Pharmaceutical Industry Need A Steve Jobs?

Little over a month ago Steve Jobs passed away and tributes that have been forthcoming are breathtaking. This is in spite of his early career shortcomings. Besides creating amazing products he was a “simplicity” genius.

He took an industry that was looked complex to all of us in a different direction. In sixties and seventies computers were complex monsters humming in air-conditioned basements. He just simplified them. There were many contributors who participated in his simplification process, but his vision changed how the world interacts and socializes. He mesmerized us with simplicity of complex products. He created a progressive revolution and we all waited for the next storm when he came on stage. We anticipated the next best thing. He always had one last thing, we waited for it and he delivered. 

Apple products are simple and intuitively operated without a written manual. Yes there are people who do not like what he did but its very likely they own some of his products. Complexity to simplicity became Steve Jobs’ hallmark.

We need a similar simplicity revolution or “creative destruction” in pharmaceuticals. Actually pharmaceuticals need a double revolution that have to be carried out in parallel, first in API manufacturing and second in formulation of a drug dose.

Is a pharmaceutical manufacturing technology revolution possible?

Yes it is and it has to start in the laboratory where we react chemicals to produce the API (Active Pharmaceutical Ingredient) and mix it with inert excipients to create a dose. Many will say we have been successfully doing this for over 50 years and the processes work. Yes the processes do work but we go through many hoops, iterations and gyrations to produce quality product. We recognize these deviations and anomalies and explain them using different acronyms. We are enamored with them and discuss them at every opportunity. We overlook how these can be eliminated and what is possible. There are many proposals on how to get out of the rut but there is more talk than action. If there was action we would see results and instead of discussing various acronyms will be discussing the results.

If we step back, look and listen to the chemicals, we will realize that they individually and collectively are telling us how to create a simple process. We are ignoring their shouting and hand waving as we are influenced by what our text books tell us and what we are practicing in the laboratories. All of this is being manifested by stoichiometry and yield of the process.

Text books teach us general principles. We have to combine what is in the text books and what the chemicals are telling us along with our own creativity to develop a process that is simple and creates a product that is exactly same irrespective of who and where on the planet it is produced.

Our inability to react to what the chemicals are telling us has led to processes that are inefficient, unsustainable and complex. Since our customers have no choice for cheaper alternates we have passed our costs to them. Our comfort with our profits does not give us any incentive to simplify our processes.

I suspect and it is inevitable before long some “pharmaceutical nerd” will come along and challenge the pharmaceutical manufacturing technology status quo and will create pharma-iPod or iPad. It could be by someone from any of the developing countries who are on tail of the developed countries. It would not be surprising if it happens sooner rather than later.

Steve Jobs would say to us pharmaceuticalites “Stay Hungry. Stay Foolish".

Girish Malhotra, PE

EPCOT International 

Drug shortages: Causes and Cures

Lately we have been reading and hearing shortages of many drugs. As a matter of fact the US FDA on a routine basis publishes the list of drugs that are in short supply. Families and doctors of patients who need these drugs have a cause of concern. Hospitals, where some of  these drugs are needed, have become creative to determine what possible approved substitutes could be used. This can be a challenge. It would be worth reviewing the cause and cure of the shortages.

Before we begin to discuss the reasons for the shortages, I would like to clarify one point. We cannot and do not have any reason to blame any of the global regulatory bodies for these shortage. Regulations are minimal and might be a challenge who do not follow them and/or do not have equipment that is suited for the process. If the companies cannot follow these minimal standards then their being in the business should be a cause of concern.

Since drugs are manufactured, the shortages can be created by any or combination of the following. There can be other reasons also but I believe the following generally are the most important.

1. Raw materials
2. Process equipment
3. Product quality
4. Manpower

The above individually and or collectively can and will cause product shortages in any business where products are manufactured and/or are assembled. The reasons outlined above are not new. Every business and engineering curriculum, where manufacturing processes are discussed, review the effect and cause of the above four.

Since pharmaceuticals are highly regulated to protect patients, regulatory bodied particularly the US FDA proposed good manufacturing practices "cGMP". They have become the global benchmark. Some may consider them to be difficult to incorporate in their manufacturing routine but they are minimalist. Science and engineering curriculum teach us methods that if applied properly will exceed the "cGMP" guidelines and will cost less than any one can imagine. We just have to do the right things in the first pass. We all know that second or additional passes to achieve quality will cost additional money and there are no assurances that each subsequent pass will produce quality product.

Some of the steps to avoid shortages are well known. Occasional review helps.

Raw materials:

To ensure raw material supply, developers have to qualify more than one supplier who can supply materials on a timely and as needed basis. In addition, the process developers have to make sure that the materials from each alternate supplier can be converted to quality product. Such an exercise can minimize availability and scheduling issues.

Process Equipment:

If the equipment used to produce a product is not designed for the process, product quality issues will come up.

Another cause of delays can be equipment availability. We need to recognize that due to low dosage, API/formulated drug volume per batch per plant are generally low compared to the volume of fine/specialty chemical products. Since the API/drugs due to their toxicity cure a disease, it is necessary that the equipment be very clean to prevent cross contamination. This, due to low production volume, can result in equipment availability and scheduling challenges individually and/or collectively. All these can lead to product shortages. There are ways to eliminate these situations and requires a revamp of manufacturing and business strategies.

Product Quality:

Product quality is dependent on process robustness. However, in pharmaceutical manufacturing especially in the manufacture of API, due to low dosage resulting in significantly low volume of API per batch per plant economies of scale i.e. the best processes are not possible unless an effort is made to have designated equipment for the product. With the current methodologies and manufacturing set up engrained in our thinking the problems of shortages will persist. This can only be eliminated if we overhaul of the process development and manufacturing strategies. However, due to high profitability such a shift might not be in the offing.

Manufacturing technologies used in the pharmaceutical manufacturing are borrowed from the chemical industry. Chemical industry believes in process of continuous improvement, lean manufacturing, six-sigma and quality first through competitive innovation. Pharma has not done so and needs to do that. There is significant discussion and all seems to be focused at formulation of drugs. Many might not agree but API manufacturing, heart of every drug, is generally not considered part of the pharmaceutical manufacturing. This adds to the problem.

Manpower:

Why and how manpower enters into the quadratic shortage equation as it should not? Reason it does is due to very infrequent runs of the same product. Since many different products are produced using the same equipment, there is constant juggling of materials and methods. All this can lead to errors i.e. potential product shortages. Constant manpower training can add to manufacturing delays and lack of it can cause “off-quality” product resulting in shortages.

Companies need to consider and invent methods that will eliminate shortages. This could be higher production volume per run or better technologies so that different products can be produced in the same equipment. Re-training of manpower if needed would be more organized.

One solution can not fit every product or company. Each company has to review its situation and has to take steps to minimize shortages. They can be minimized if we want to.  

Girish Malhotra, PE

EPCOT International 

Generics Fees: A Fantastic Opportunity

US FDA has created a fantastic opportunity for incorporation of the best manufacturing technologies in the pharmaceutical hemisphere by charging fee for every generic company globally. The carrot of early approval if that happens will drive to have the best processes for API & formulation if the companies want to produce repeatable quality and safe drugs. Early approvals also will mean quicker profits compared to the current status. It would be a win-win.

Early approval will require that the processes meet the regulatory requirements on the first pass. QbD will have to be the mantra. This can happen only when the filing company has command of the process through best of the manufacturing technologies. It would be in companies’ interest to implement technologies to recover cost of fees. Having the best of the technologies will also mean the companies that cannot meet the regulatory standards after paying fees will have to review their long-term business strategies. Best will survive. Long-term this could result in consolidation. Lower costs could be in the horizon also.

Consolidation would have additional benefits of capitalizing on economies of scale i.e. better manufacturing technologies and processes will be the driver for the companies to stay in business. Better quality drugs will mean that many of the TLA’s (three letter acronyms) that are prevalent in pharma will fit in the puzzle and might not be needed. QbD and PAT will become way of life rather than perceived voodoo science as many think. Before the fact rather than after the fact will force competition.

I firmly believe adoption of fees will be the best happening for the generic pharmaceutical companies. Companies who believe in technology will survive. Congratulations and thank you to all individuals who have been involved in driving this discussion.

Girish Malhotra, PE

EPCOT International

Pharmaceutical Quality: Is it a Company or Regulatory Responsibility?

A recent report ⁽¹⁾ by a committee of Board of Directors essentially gives Johnson & Johnson a clean bill of health for the following incidents at McNeil OTC. I have not reviewed other issues discussed in the report.

·       Motrin dissolution

·       B. Cepacia issue

·       Musty odor

·       “Super potent” Tylenol

Fortunately no one died but what makes the report interesting is how it lays the partial blame on FDA for some of its guidelines, exonerates J&J from its quality lapses on self-induced manpower shortages and does not discuss company’s inaptitude which is obvious to anyone who is experienced with manufacturing operations.

Whatever the reasons of the problems, problems were created at the company and not by the regulatory agencies. Johnson & Johnson is globally known for quality. It seems attaining profits and bonus targets took precedence over product quality.

My conjecture is that for the Motrin and Cepacia problems are raw material issues. If J&J's suppliers did not supply material to spec or supplied contaminated materials they should be held accountable and responsible. Other question that could be asked to J&J is that were proper raw material specifications in place.

Strangely the “musty odor” is still around J&J and I wonder who is being held accountable for it. May be “Mr. Product Recall” should be called to the rescue or whitewash.

Since details of dissolution issue are not elaborated, one can conjecture that the dissolution problems happened due to material that was used, was different from the specified material. Thorough analysis of off-spec material would have identified the problem and it should have been part of the report. Why this is omitted is an interesting question?

Cepacia problem occurred due to contaminated raw material from the supplier. This suggests that either the specifications were not tight or some error happened. It should have been caught at the supplier’s lab or J&J lab during quality check before the product got used. FDA guidelines suggest that the companies check their incoming raw materials. I guess the company did not follow the regulatory guidelines.

Production of “super potent” Tylenol is not only a failure of “good manufacturing practices (poor scale-up)” but also a failure of “good accounting/business practices” especially as it happened over a period of time. During the five-month period J&J produced 10 batches. Error of overcharge (between 11-24% over specifications) should have been caught as soon as they happened through material and cost variances, a standard practice of inventory and cost management controls. Since they were not caught immediately is suggestive of McNeil had issues with their operation and management systems. Since it took about five months, if it is true, to find out over charges it is suggestive that the whole Tylenol profit center needs a thorough scrutiny. It makes one wonder how many other things are being hid under the carpet?

The following excerpt from the report needlessly points J&J’s problems to FDA regulations. It should not have been included as it basically suggests that US FDA’s cGMP guidelines are vague. It is like making FDA partially responsible for whatever happened at J&J. Similar implication could be extended to other global regulatory bodies.

US FDA or any other regulatory body should not be blamed for J&J’s inaptitude. These regulatory bodies are not in the business of designing processes and methods for companies’ products and processes. It is the responsibility of the companies to ensure they have processes and methods that deliver quality products based on good science and engineering principles.

The FDA is responsible for enforcement of the FD&C Act, and has promulgated regulations that require drug product manufacturers to employ “systems that assure proper design, monitoring, and control of manufacturing processes and facilities.” The FDA’s cGMP regulations are intended to “assure the identity, strength, quality, and purity of drug products by requiring that manufacturers of medications adequately control manufacturing operations. This includes strong quality management systems, obtaining appropriate quality raw materials, establishing robust operating procedures, detecting and investigating product quality deviations, and maintaining reliable testing laboratories.” The FDA does not differentiate between the manufacture of OTC medications and prescription medications, treating both as drugs subject to the same cGMP requirements.

The FD&C Act and the FDA regulations are sparse on the specifics of what constitutes cGMP. The FD&C Act states only that manufacturers of drug products must employ cGMP. The FDA’s implementing regulations, in turn, are only marginally more specific -- requiring, for example, that laboratory facilities be “adequate,” that manufacturing facilities be “of suitable size, construction and location,” and that certain equipment be used “when appropriate.” The FDA asserts that this level of generality provides a flexible approach “to allow each manufacturer to decide individually how to best implement the necessary controls . . . .”

Report citing “sparse on specifics” is really questioning the intelligence of every chemist and chemical engineer. Experienced chemists and chemical engineers while working at regulatory bodies have suggested cGMP guidelines that will allow the processes to produce quality products. Process developers at companies have to understand the intent of the regulations and develop and commercialize processes that will deliver quality product. If the feedback to the report writers is that the regulations are vague even then it is the responsibility of the company to use processes that produce quality products.

Regulatory bodies are not in the business of suggesting how each process should be designed and operated. It is the responsibility of the personnel at each company to ensure that the produced drugs meet established quality standards. If the members of Board of Directors of a company are suggesting that the regulatory bodies should design and specify equipment, operations and methods then the report writers do not understand the intent of CFR 21 Parts 210 & 211. Is it not the responsibility of the every company (public, private or government held) to ensure that their products are safe for their customers?

In this report J&J’s independent board members (many question their independence) are suggesting that lack of manpower caused the problem. It is management’s responsibility to make sure that they are staffed properly and the company delivers quality products to its customers. If the management is not responsible then the Board of Directors should be held responsible and accountable for company's actions or they should make sure that the right people are managing the company. Reoccurrence of odor issue is suggestive of that company has not learnt from past experiences.   

Lately reoccurring drug quality problems have become part of our life. This is because companies are using the least technologically advanced and economic manufacturing methods to produce their products. Having fancy equipment does not guarantee quality product.

To ensure product quality pharmaceutical companies are relying on repeated quality by analysis (QbA) using technologically advanced analytical methods. Even with such technological sophistication they have had issues that have resulted in product recalls. We are all familiar with Baxter’s Heparin issue. Chinese raw material suppliers had adulterated their product with an inert.

Not understanding and/or having the right process should be a cause of concern. Analytical methods will only tell the after the fact problem. These instruments do not fix problems. Unless companies have command on their process and its raw materials the problems will persist. Regulatory bodies should not be blamed.

When the reason of quality problem is being passed on or an excuse is given and no one gets prosecuted, it might be time to change the laws. Tiered heavy fines could be levied. These fines could be at different points of the distribution chain with the heaviest being if the product gets to the pharmacy shelf. Penalties could include monetary fines along with prosecution of progressive levels of management.

The report mentions lack of attention by certain non-quality control workers such as  “engineering and operations”. With such implication one would expect detailed investigation. Why did the board not explore this area and detail this lack of attention. It is fascinating that the word “engineering” has been mentioned only ONCE in the whole report but they are blamed. If it was operations that did not pay attention, it is suggestive that proper procedures were not put in place by the company management.

All of the above suggests that J&J has significant opportunities with their total business systems. Above issues may be just the tip of the iceberg. J&J is relying on post analysis (QbA) methods to produce quality products. A complete audit of their manufacturing processes and methods will unearth many issues that can save J&J significant monies. QbD (Quality by Design) methods could be implemented in many cases thereby assuring high quality and improving profitability. This is necessary and should be done if J&J wants to prevent future embarrassment.

I wonder how James Collins would feel today about J&J if he had to re-write his “Good to Great” book. Would J&J be part of the book?

Girish Malhotra, PE 
EPCOT International



(1) http://freepdfhosting.com/bc85fe20b1.pdf

Drug Prices: Food vs. Medicine - A Difficult Choice for Some

In my recent trip to India, during my discussion with physicians about the various drugs that are used for HIV and tuberculosis, I was informed that many times patients (lower and mid economic strata) do not complete their medication course in spite of the low drug prices. This is due to family has to make a choice between food for the family and medicines for an individual. I had to explore.

I was able to get the average prices of some of the drugs in India. Comparing the price of the same drugs in US was a shock. Yes compared to India the prices of the selected drugs are higher by multiples of 2 or 3 or more.

All this begs a question why we have multiple magnitude differences when many of the active ingredients are coming from India and China. There has to be a rationale for the drug pricing in different countries. My conjecture is that the drugs are priced based on local country economics rather than on competition. Since humans want to extend their life, the drug prices are set at their highest level the customer can afford. Even with the prices being set at levels so that the customers can afford the drugs to treat their illness, many at times have to make choice between drugs and food needs. Such situations exist across the world. A question needs to be asked and it is: how and what can be done to make drugs more affordable while the companies retain their profits.

Based on economic principles competition drives to lower prices and best of the technologies drive to retain profits. However, it seems that the drivers that work in every business do not work in pharmaceuticals. Best of the manufacturing technology is not needed to deliver profits. Pricing delivers profits.

Since I have not seen many articles published about setting drug prices, one would assume that there is minimal to no discussion in the public domain. Arguments have been put for prices being high due to monies needed for new product development and need to meet different regulatory and pharmacopeia standards. If so the prices should equalize across the board in every country but that is not the case.

There are ways to lower costs. If we have one global pharmacopeia standard instead of multiple standards, as we currently have, better manufacturing technologies through higher production volume will bring the production costs down. Global politics, disagreements and having controls of standards have prevented a single global standard.

Other factors that have prevented lower drug prices are lack of “economies of scale” and less than optimum technologies to manufacture the active pharmaceutical ingredients and their formulations. This is due to low volume of products being made at many sites. Some would disagree with my hypothesis but we all know as the production volume per site increases, manufacturing technologies improve and costs come down.  

Since the pharmaceutical dosage is in milligrams, the total volume of the active pharmaceutical ingredient needed to serve customer needs is low. Volume per site is further reduced when many different companies manufacture the API. Depending on the selling price, a billion dollar drug sale per year administered at 0.5 milligram level can have total API demand of less than 2,000 pounds per year. If this API is manufactured at multiple sites, economies of scale will not exist. Most likely the manufacturing process will be inefficient and asset utilization will be less than desirable. Due to these factors regulatory compliance needs pose additional challenges. Improving on these is not part of the pharmaceutical business model as the companies are able to pass inefficiency costs to the customer and are able to satisfy their stakeholders by meeting their profit objectives.

Some might argue that my views do not hold water. I would illustrate my point using a fluoroquinolone, (Levofloxacin), an antiretroviral (Tenofovir) and Isoniazid used for tuberculosis.

Levofloxacin is used to treat a number of infections including: respiratory tract infections, tuberculosis, cellulitis, urinary tract infections, prostatitis, anthrax, endocarditis, meningitis, pelvic inflammatory disease, and traveler's diarrhea ⁽¹⁾.

Levofloxacin (750 mg) tablet can be purchased in India for about Rs. 10 per tablet (about $0.22 at Rs. 45 per dollar exchange rate) whereas the average wholesale price for the same dose tablet in US can range between $22-24.00 per tablet. At a local drug store an uninsured person would pay about $1343.00 for 30 tablets i.e. about $45.00 per tablet.

There are about 20 companies (12 are in India) on the Drug Master File that can manufacture levofloxacin. If the global sales were about $ 2.0 billion per year, the total API demand would be less than 200,000 pounds per year. If all of the 20 companies were manufacturing the API, there is a minimum possibility of taking advantage of economies of scale. Processes will be inefficient at best.

If the selling price of the levofloxacin API were about $100.00 per kilo then at 80% formulation efficiency the cost of API in each 750 milligram tablet would be about 9.5 cents. If the factory cost of the formulated and packaged shelf ready tablet were to be another 9.5 cents per tablet, the factory cost of the formulator would be about $0.19 cents per tablet. Considering the sale price of about 22 cents per tablet in India suggests that my API price assumption is high. It also suggests that huge profits are being made in the by the companies who are producing and selling Levaquin in US, the brand name for Levofloxacin.

Another fluoroquinolone API meeting US Pharmacopeia standards is sold at about $50.00 per kilo. Same API meeting Indian pharmacopeia is sold at about $30.00 per kilo. This suggests that we need a global pharmacopeia standard to remove price differential and gain on economies of scale.

In a recent paper the process yield of Tenofovir, a HIV drug, was increased to 24% from about 13%. This is significant improvement but the yield is still low. With this yield costs associated with waste treatment and process inefficiency are being passed to consumers. If Tenofovir were a specialty chemical, at the 24% yield, it would never be a commercial product. However, since it is a profitable drug, costs become irrelevant. Prices have come down by four folds ⁽²⁾. Clinton and Gates Foundations have helped to lower costs and distribute these drugs. If the yield could be improved from 24% to 65% or more and can capitalize on economies of scale and the costs would reduce drastically. However, there is no interest in reducing costs further as making drugs more affordable could possibly eliminate foundation funding.   

In India Isoniazid 300 mg tablet (for tuberculosis) wholesales for about 2.0 cents per tablet. Same drug in US wholesales for about 7.6 cents per tablet. Even at the low price many in India have to choose between food and medicine.

To retain profits companies are raising prices. Governments are slowly moving towards new drug and price controls ⁽³⁾. If this were to happen across the board, companies would be forced to change their business model. Since generics have come to play also, the new landscape will be interesting. 

Everyone would agree that competition improves quality and lowers costs. I wonder would a “subsidy-less” world bring real competition and innovation to the pharmaceutical world. Would the drug prices be lowered? I fully recognize that the healthcare programs are necessary for the masses but does that mean we have to live in the topsy-turvy world of drug price differentials and the drug prices could stay at their highest levels.

We have to recognize that the health insurance programs subsidize medicine prices for the consumers. Thus in the countries that have such programs an average consumer does not know or understand much about price of medicines. Even the physicians do not know the sale price of the medicines they prescribe. If there were no insurance programs, we all will have to pay for the medicines from our pockets. This could force many to choose between food and medicines. Should we accept the scenario of having to choose between food for the whole family and medicine for an individual? If this were to happen it would be a challenge and the ensuing debate would be of a kind that we have never imagined.

Girish Malhotra, PE

EPCOT International

  

1.  http://www.drugs.com/monograph/levofloxacin.htm
2.  http://utw.msfaccess.org/drugs/tenofovir-disoproxil-fumarate
3. http://www.businessweek.com/magazine/content/11_24/b4232025180703.htm

Information Challenges for Product, Process Development and Process Design: A Reality Check

Recently in my efforts to assist a client to find suppliers of certain product, I took the easy route i.e. search using one of the search engines. The results were very interesting. Most of the product/s were available from Chinese and/or Indian companies. All of the sites had minimal to no information on any physical properties or performance data. So asking them for information would have been a waste of time, as they have none.

Since I knew the application and potential products, and I have been following various mergers, my search by companies was an easier route. To my chagrin, I experienced the following: At the majority of websites if one clicked on “Contact Us” more than 75% of the time you get a form that you have to fill in [practically give your life away] and wait till the time whenever you get a response. For multinationals one has to dig deeper to get to your country and hope there is contact telephone number so you can get a customer service telephone number. You might be lucky if you get the headquarters phone number on their website. Your project is on the path for a delayed schedule.

Since not many customer service numbers are available, you can call the main office and hope you will be able to talk with a live person who will give you a customer service number. You have to go through a debriefing before you get a number. Once you get the number then there is a 50% chance that you will have to leave a voice mail message and leave your number and hope you will get a call. This could be an unknown time. Your project got further delayed.

If you are lucky and are able talk with a live customer service person, they want to have detailed information about you [e.g. e-mail, phone number, state besides your and company name] before they can tell you whether they have a product that could come close to your needs. It seems they are more interested in filling a form indicating they talked with a person rather than exploring what a potential customer needs. They also want to know the annual quantity when I do not know whether their product will work for my application. Since we are dealing with chemicals, they want to know how the product would be used. They even have the audacity to ask the details of your product development. If you tell them it is under development and confidential your chances of success reduce dramatically. One has to make up some application scenario to go past the customer service person to talk with the right technical person. Since a chemical could be common for different applications, you can be bounced around. You may still end up leaving a voice mail message. If one does not answer the questions correctly there is a good possibility that information might not be provided.

Yes everyone is busy and we do not have time. Are we too busy nursing our blackberries and e-mails that we do not have time to talk with the potential customer who puts food on our table? The question becomes how can the companies facilitate information availability to chemists and chemical engineers so that they can develop an efficient, economical and sustainable process or product? ICIS (OPD) and Chemical Week directories used to be an excellent source of information but not anymore. Their size has shrunk. Many producer companies have disappeared. I contacted some companies from the list for the products I needed. Many did not respond and other had the product category listed but no actual products. On one hand we want people to be productive but on the other hand create many road bumps for them to complete a project on time.

I can almost bet none of “C, MD, E, V or G” levels at any chemical companies have toyed with their website as a customer and found the challenges customers [existing and potential] have to face to get meaningful information. I am sorry to say most of the companies in the developed countries fall in this category. Companies in the developing countries will give you MSDS that has been copied and has minimal information. By having minimal information they might be fulfilling a regulatory obligation. I wonder if regulatory overseers have ever looked at them to see if they comply.

What are the downside consequences of ones inability to get the information on a timely basis?

1.     Delayed project.

2.     Disgruntled customer who has wasted her/his productive time.

3.     Since the information is not readily/easily available, there is an excellent possibility that the developed product would not work and has to be redone or the process is inefficient, uneconomical and unsustainable or extra effort is needed after the fact to optimize what was to be an excellent product or process. Unfortunately for active pharmaceutical ingredients and their formulations once the process is “blessed” there are no second chances.

4.     My conjecture is that the lack of information is the leading cause of not having “Quality by Design” processes for the manufacture of pharmaceuticals.  

I asked my colleagues/clients in the business do they encounter similar challenges. Each one of them chimed in and shared their sad stories. Less than 25% had good experiences. They rely on their network and on the sales person knocking on their door to share virtues of their offerings.

In the good old days - it seems like a zillion years ago - companies had brochures that were helpful and we had them stashed for reference. By the way they were an excellent source of physical property information. We all know physical and chemical structures do not change with age. Personal libraries were shared. At mega companies there were data books.

As chemical companies went through reconfiguration, the data availability started to become scarce. Internet brought the hope that it will reduce personal data banks and could easily access the information to design efficient, economic and sustainable process. Unfortunately that did not happen. It has become harder and a challenge to get minimal information. Material safety data sheets (MSDS) are provided as a substitute of technical data sheet. They do not even come close. Many at the companies agree that their websites are difficult to navigate and leave lot to be desired. I wonder why they do not ring the bell up the chain. 

If you want real product information, one has to register and almost sign their life away except for their family jewels and hope they will remember the password for future use. All this is dependent on one receiving a confirmation mail that one has to click to be part of the database. There is 50% chance one might not get lucky in these areas. I am sure there is some rationale reason for this personal information but I can bet none of this information is reviewed let alone used to follow up potential customer satisfaction. I also wonder how this information is being mined. Is it being abused? If you are able to log in and download the information there is no guarantee that necessary technical data including physical properties would be available.  

The bottom line: The above discussion is not complaining or a recitation of actual experiences but an identification of an opening and excellent opportunity for the companies to look at filling their half empty glass. It is very possible that in today’s unsecure world “legal beagles” might advise against easy sharing of information but every crook will find the information one way or the other. By building road bumps and road blocks companies are ever lowering productivity of their own employees and their customers where information is needed to design a product and/or process.

How can one proceed to make their company’s information more accessible to potential customers? First, the problem has to be recognized by “C, MD, E, V or G” levels in a company. Let them go incognito on their own website or a search engine to see what the reality of life looks like. It seems that in the name of protecting intellectual property we have lowered our productivity and creative thinking. They might also find out the navigational challenges their website creates. Maybe they might lead us to the rainbow? In addition, website are designed by designers to look pretty. They are but I wonder how much input they have from the actual users. A point to cogitate!

Girish Malhotra, PE

EPCOT International

P&G and Teva is a win-win and herculean challenge for many.

Last Week P&G and Teva Pharmaceuticals started a relationship. This is new frontier that will be a challenge.

I have posted my views at the link http://www.glgroup.com/News/PG-and-Teva-is-a-win-win-and-herculean-challenge-for-many.-53164.html

It will be interesting to see how the playing field changes.

Girish Malhotra

Are patents a double-edged sword? Perspective Matters.

Patents are filed to preserve intellectual property for the duration of the patent life. This is the fundamental right of every inventor as they protect their invention from competitors and gives them competitive advantage. Pharmaceuticals have relied on this right to preserve their inventions. These patents are a treasure trove for the competitors and folks who want to violate someone else’s intellectual property.

Fine/specialty chemicals and coatings are generally commodity products and relative to pharmaceuticals do not face many contentious patent battles. However, due to high profit margins, the patent game is very different for the pharmaceuticals.

Tradition has been that when filing patent for a new chemical molecule generally extensive information about different synthesis paths that have been explored and could be used to manufacture the new molecule are included in the patent. The intent is to block competitors from making the same chemical by the routes that have been used and suggested in the patent. Information disclosed in the patents is of significant benefit to the competitors and/or other inventors to create processes that are better than the ones created by the original inventor/s.

With the changing economic global landscape the World Trade Organization (WTO) membership has grown. Suddenly the global creative pool has expanded multifold. Creative minds in the developing countries have started to exploit the knowledge in the public domain. Internet has been a boon to their creativity and imagination. They are able to reduce their process development time as they judiciously use the knowledge that is easily available. They are also able to develop and create processes and chemistries that are simpler and cheaper than the original invention. Ten years ago all this was unthinkable.

Generics as well as brand companies are using different strategies to capitalize on such fetes. Knowledge is being effectively used to challenge pharmaceutical patents following Hatch-Waxman Para IV provisions. Patents from competitors are being used to prevent cost reduction of existing products. Generics have enjoyed significant benefits through “pay for delay” and other collaborations. It is well known that “pay for delay” is being used to delay generic entry i.e. lower costs for the consumer. I call the patents and contained information a double edged sword.

As the global pharmaceutical playing field changes, businesses have to address a question. Any company that has invented a new molecule to cure a disease will file a patent. It has to give a method of synthesis but does it have to give its alternate routes from literature. By giving minimum information it would make the literature search for others a challenge. Inventor company would have developed proprietary manufacturing process/s. They are company’s confidential information and can be protected through proper documentation. Point is why make things easy for competitors in this competitive world. I have relied on such confidentiality and been able to protect the synthesis methods and associated technologies.

Patent attorney’s would defend what has been the tradition. Business people have to decide what should be path forward while considering the advice of their patent counsel. My conjecture is that least shared is most protected and could prevent patent invalidation/challenges based on synthesis routes. Any strategy that challenges competitors is an advantage for me. Anyone can chime in with their opinion.

Girish Malhotra, PE
EPCOT International