All opinions are my own.

Sunday, April 15, 2012

Can the Combination of Creative Destruction and “Steve Jobs’ Traits” Lead to Pharma QbD Spring?

The answer to the question of whether there could be a revolution to bring about Quality by Design (QbD) in pharmaceutical manufacturing, unequivocally, is yes. But we need some outsiders who can conspire with the insiders to be the flag bearers within pharma companies. Outsiders can be the counsels/co-conspirators to the insiders for the coup-d’état. Chemists and chemical engineers associated within the industry need to review what is happening in their process development, commercialization and manufacturing practices. They need to pick one process for their revolution. Success there would spread like wild fire within the company and in the industry. We need small successes to create the full blown ‘spring.’

Insiders need some tools. Some of these have been discussed in my earlier blogs but I wanted to discuss some specifics that might assist their creativity and imagination.

Recently, I expressed my views how to improve and innovate processes by exploiting physical and chemical properties (Chemical Engineering, Vol. 119, No 4, April 2012 pgs. 63-66) of the raw materials that produce products that are use to produce different products.

Besides exploiting [chemical] properties there are other avenues that are available to us to improve technology and manufacturing methods. However, due to tradition and what we learn during our education and professional life, circumstances and company culture, either we overlook or do not consider situations that could simplify technology and manufacturing practices. No one is at fault as most of us are tradition bound and have not experienced creative destruction or exploited our “Steve Jobs” traits. I have seen many different interpretations of Steve Jobs traits. However, I liked the ’10 Traits of Steve Jobs That Can Make you a Better Street Photographer’ most as they encourage simplicity, imagination and creativity. Cases of creative destruction are well documented as business cases in literature.

Steve Jobs was a creative destructionist. He was able to accomplish what he wanted. Many pundits will question his methods but he changed the playing field for years to come. Multiple revolutions and most of us love Apple products. It is ironic that he stumbled at first, was ousted from the company he created - a humiliating experience - but he did not lose his vision for simplicity and innovation.

Going back to how, what and why innovation is possible in pharmaceuticals, chemicals and other related industries requires developers, engineers and scientists to be continuously thinking out of the box while living in the box. The tools and methods are available to us. They are around and in front of us. We are either intimidated or are afraid to say why we are doing what we are doing. Questioning what delivers profits can be considered counterproductive. However, better understanding of what we do catalyzes improvements.

I believe that challenging the status quo and “what if” exercise can be an important place to start simplification and innovation of every process. Following are two illustrations related to challenging the status quo of chemical reactions i.e. Active pharmaceutical ingredient (API) manufacturing. They can be extended to any formulation. This discussion is no reflection or criticism of any company or its people, practices or processes but examples of alternate possibilities that are simple, safe and environmentally friendly.

Chemical reactions

1. Acetylation of p-Aminophenol (PAP) to acetaminophen:

This is an age-old reaction where acetic anhydride is reacted with PAP to produce the product. However, since acetic anhydride has become a controlled substance, thanks to the producers of methamphetamine, regulations control its usage. The process as executed needs neutralization of the excess materials and by products. However, there is an alternate method staring at us that can produce the product at higher yield with lower effluent. Due to intellectual property considerations I am not able to discuss the alternate process. Alternate chemistry is part of the textbooks but we have not practiced or tested it because it is not mentioned in our textbooks or taught in our classes. We have missed to see what is in front of us.

2. Sodium salt of ring closed of o-phenol amines:

In these reactions traditional chemistry involves diazotization of the corresponding amine with sodium nitrite and an acid. After the ring closure, the product is washed, distilled and added so that the appropriate concentration of sodium salt solution is produced. All this is very traditional. NOx emissions and effluent have to be managed in the existing process. Process yield has room for improvement.

In an alternate process, appropriate stoichiometric amounts of amine are reacted under pressure with sodium nitrite at elevated temperature to produce the corresponding sodium triazole solution. Yield is much higher than the diazo route process mentioned earlier. It is a cleaner process with minimal emissions and effluent. This chemistry is not discussed in the textbooks, at least I have not seen it, but it is applied commercially.

My point of illustrating the above examples is to highlight that methods not mentioned in the textbooks or literature should be considered. They can create simple, sustainable and cost effective processes. Literature and patents are full of many such ideas that give us clues to improve processes.

Cost sheets:

The development of product cost sheets is an excellent tool that can lead to process simplification and innovation. Every cost sheet has two segments; raw material cost; and conversion cost.

A ‘what if’ exercise with alternate yield and stoichiometry can show us the impact of process technology improvement. They coax us to imagine, create and eventually assist us in developing better technologies and sustainable processes.

Raw material prices have significant influence on the total product cost i.e. profitability. Most of the time people think that we do not have much influence on the suggested price from suppliers. I would beg to differ. If we understand how the needed raw materials are produced, we can estimate supplier’s costs and profit margins i.e. our purchase price. This might sound like a very cumbersome exercise and it can be a challenge, but since our profitability needs to be maximized, such an exercise is worth the effort.

Conversion costs consist of various costs segments such as labor (hourly and salaried), utilities, maintenance, depreciation and miscellaneous items. How we operate the plant can influence the contribution of each element and their influence on a product’s cost.

Over the years while doing ‘what if’ exercises I have developed some guidelines that are useful to me. They are my rules that have helped me to develop a starting point for process simplification and improvements. These can be altered based on the chemistry and complexity of the process.

The process yield of any process step should not fall below 66%. If the yield is below this benchmark, the chemistry and its execution need help. Since there can be multiple steps for the whole process, the overall yield can drop significantly. A five-step process each having 66% yield will have an overall yield of about 12.5% (0.66 x 0.66 x 0.66 x 0.66 x 0.66=0.125), suggesting significant opportunities. My goal is to maximize the yield for the whole process to above 85%. This might look unattainable but unless we strive to get there we will not achieve our objectives.

Another rule that I have developed is that ratio of raw material cost - to - conversion cost ratio should be around 1.5 - to - 2.0. Depending on the complexity of the process there can be some variation. As we edge closer to one or less, the process needs significant work to improve its processing methods and execution time. We are also encouraging and creating an opportunity for the competition and we have done that in pharmaceuticals.

Consulting companies such as McKinsey are using cost sheet exercises to assist clients in improving their profitability.

My conjecture is that with the pharmaceutical companies losing billions of dollars/year due to patent expiries, poor product quality recalls, and increasing citations, the time for a ‘Pharma QbD Spring’ has come. As I stated earlier, we need to be cognitive and selective about which products we need to consider and innovate. We need small successes that need to be publicized and they will have a domino effect on the industry and our spring will then have arrived.

Girish Malhotra, PE

EPCOT International

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