All opinions are my own.

Friday, November 15, 2013

Recent Posts That Relate to Pharmaceuticals and Chemicals-I

The following posts have been posted on www.pharmaevolution.com and might be of interest. Website www.pharmaevolution.com has been eliminated. If the reader needs a copy of the post, please post a request and a copy of the posts can be sent.

The Nail That Sticks Out Could Change the World: When Culture Stifles Innovation, November 14, 2013         


Who are the technical innovators in the US? The image we often have is that of the young Silicon Valley geek or the surfing California biopharma scientist -- sometimes brash and unafraid to challenge authority and champion new and better ideas.

Their peers in other countries behave quite differently. This is especially true in Asia, particularly in the Far and South East. In India, China, and other parts of East Asia, cultural norms may impede innovation, even when the game-changing ideas come from extremely smart, highly-trained and educated people, and proven problem solvers.

Generally, one of the following will stand in the way:
  1. Fear of offending superiors/bosses
  2. Fear of challenging the status quo
  3. Fear of failure
  4. Fear of acceptance of ideas
There's one fundamental difference here. In Western culture, suggested innovation and improvements are not viewed as upsetting the apple cart, but improving it. They are expected and encouraged to improve business practices.

However, in the Eastern cultures, suggestions may be interpreted as insubordination. Any question that could be interpreted as challenging the prevailing practice, especially when it is raised by a junior professional who does not have the authority, is viewed as unacceptable. A recent article in Time magazine offers some examples.

If the practice has been in place and is profitable, and was put in place by higher ups in an organization, suggesting an alternative will be viewed as challenging the intellect of the superiors. It will be seen as attacking the ingrained culture.

Thus, a junior person working for an Indian or Chinese pharmaceutical company will not propose an idea that will improve current practices or profitability as there is fear of failure or fear of less than expected success.

In addition, some people in the organization will also make a point of blocking success and making sure that any new good ideas fail. (This can be true in Western nations as well).
Alternative practices will need to be tested and any expenses related to that testing will need to be justified and approved by the higher ups, in addition to challenging their wisdom.
Often, there is no funding for testing novel ideas, and no "skunk works" for trying out new alternatives.

Ideas from outside the company -- say, from a company in another country, from a competitor, or best-practices from another industry that might work in the organization -- have even less chance of being heard. This is even true for ideas that come from a paid consultant!

Unless ideas are proposed within the company and come down the chain of command, many Eastern managers consider them as challenging prevailing competence. Unless approved by superiors, they will not get anywhere.

Unfortunately, this approach can result in problem solving challenges and stand in the way of long-term progress.

Developing countries have the talent needed for innovation, and that talent needs to be nurtured. Opportunities must be afforded and offered to use the ideas of young innovators. Trust and accountability have to become part of the organizational culture.

On a practical level, establishing a discretionary spending pool should become an established practice at more Eastern companies. In addition, the failure of an idea should not be considered a true failure, but, rather, a learning experience that can benefit the organization.

Management letting go of authority and control is the biggest challenge standing in the way of innovation. This may even be true in the West, but it is so much more so in the East. I'm sure that every organization isn't this way, but I would say that more than 60 percent of the commercial entities -- including pharmaceuticals, chemicals, and coatings companies -- in India, China, the Middle East and Asian nations, operate this way.

Some observers have suggested that change is about to take place. If that's the case, I certainly don't see it. Cultural barriers must be removed. This does not mean replacing the essence of these cultures with Western practices, but merely giving more voice to smart young people with good ideas.

I left India to come to the US in part because I was frustrated by these issues.
Management with the right vision and charisma can foster creativity and imagination, leading to significant innovation in pharmaceutical and other industries in Asia. Respect for authority and for knowledge should not be an excuse for paralysis.

Millions? Billions? A Matter of Perspective September 21, 2013 


Numbers have different meanings in different contexts or scenarios. In pharmaceuticals, a billion, or billions, in sales would define a blockbuster, while anything less than that would be seen as a marginal success, or even a failure. However, in the generics world, millions represent a sizeable business opportunity. Even increasing sales by one table per day, to a billion patients, would be major growth.

Looking at the numbers explains why brand-name and generic companies often operate as they do. These numbers are simplistic, intentionally, and are based on some assumptions, which readers can change as they see fit.

First, let's look at brand-name drugs (Table 1). In this table, I deliberately left out the number of tablets sold per day, since total sales and profits are more relevant in this business model. Generally, the sales price of a brand-name pharma tablet that is still under patent is high.

Table 1: Brand-Name Drugs 
Sales ($) 1,000,000,000.00
Profit after tax ($) 250,000,000.00
Sales period (years) 10

Since it takes about ten years to get the drug approved, a productive sale period of ten years is assumed before the patent expires. Higher total sales multiples per year (2-15) increase a drug’s success. Generated revenue affects a pharmaceutical company’s market capitalization and relative value for the stockholders and gives financial analysts something to talk about.

Now, consider generics. If a billion people were to take a medication, at an average of ten cents profit per tablet on a one-per-day schedule, that would result in $36.5 billion profit for generics companies. As the number of tablets taken per day increased, the financials would change accordingly. This is where there are opportunities, and we see many generic producers participating to fulfill demand.

Table 2: Generic Drugs 

Tablets per day: 1
Tablets per year: 365
Number of patients: 1,000,000,000.00
Total tablets/year 365,000,000,000.00
Profit per tablet: $36,500,000,000.00
Number of pharma companies: 100

Considering the economic realities, it's understandable that most name brand companies have not ventured into generics, and also, why there are so many generics companies.
Until recently, brand pharma successfully discovered and commercialized multiple new drugs per year, resulting in a steady stream of profits. Thus, they did not feel compelled to produce generics.

With brand companies losing their monopoly through patent expirations and challenges, different strategies are being considered, and we now see more name-brand pharma getting into generics markets. Will brand-name pharma companies succeed at discovering and developing new blockbusters? Can they discover drugs that are significantly better than what's already available? They are diversifying their businesses, and embracing the generic model in a number of different ways.

Generics producers have used the opportunity and served a growing need while making money by riding on the coat tails of brand-name pharma companies as their patents expired. Now Big Pharma is eyeing, or openly involved in, generics.

Generics in the last eight to 10 years have changed the global landscape. They have a significant opportunity to fulfill the needs of patients who need less expensive drugs, and they are meeting these needs.

Alternate models and strategies will, no doubt, continue to change the playing field. However, to get to a new level of business growth, manufacturers of generics (whether they are generics or offshoots of name-brand drug companies) will need to lower costs by commercializing better technologies for API production and their formulations. Economies of scale could be a way.

What are your thoughts?
Imagine… a Process-Centered Pharma  September 11, 2013

Last month was the 50th anniversary of Martin Luther King Jr.'s famous "I have a dream" speech, and this month is the 42nd anniversary of John Lennon's "Imagine" bringing images of utopia to the world.

They motivated me to ask why pharma can't seem to get itself a better business model and what that might be.

We already know all too well the blockbuster paradigm: invent, produce, market, and genericize. Yes, it has worked beautifully and kept us all employed for decades, but is it sustainable? Will it serve the needs of 60 percent of the world's population? Will it allow the industry to innovate, not just in the drugs it introduces, but also in the way it develops and makes them? Can it move the industry beyond its current quality-by-analysis approach marked by inadequate manufacturing and quality systems that slow efficiency, limit the market's potential, and are at the root of many of today's quality failures?

In developed nations, the old model is propped up by the overall healthcare system, high drug prices, and acquisitions that often fail to yield adequate ROI. Isn't it time for an easier, more ambitious plan? I imagine a new world where economies of scale are the norm. Production of key APIs or finished drugs takes place in fewer facilities. Current and innovative technologies and methods are applied to pharma manufacturing (APIs and their formulations).

In this new world, drug dosage would no longer shackle drug companies to old-fashioned mom-and-pop approaches to API manufacturing, formulation, quality, and distribution. Pharma's entire business model would be based on everything from how much an API is needed to plans for production, formulation, supply chain management, and every detail, down to the purchase of raw materials, solvents, excipients, and packaging materials. The process would determine the technologies and the improvements and would allow output to be adapted simply and rapidly to address changing business needs.

At this point, the industry continues to focus on regulation. Companies often fear that improvements would change the product profile from what regulators previously approved. In addition, they don't see any ROI for process innovation or improvement, given the low production volume of APIs or formulated drugs involved at each site.

Most of what is discussed at conferences today focuses on how to meet regulations, rather than how to create excellent and improvable processes that exceed minimal regulatory requirements. As a result, many within the industry have forgotten how to apply the fundamentals of science and engineering. We read more about risk management, FMEAs, and fishbone diagrams, for instance. Some of us might recall that this was common practice in the 1970s.

Consolidation is the key to the alternate model, but it provokes fear. People fear loss of their livelihood, but they don't realize that consolidation would increase jobs as the market expands, and it would raise the level of skills required.

Having fewer manufacturing sites would produce the economies of scale that would allow us to have the best manufacturing technologies. Moving from regulation centricity to process centricity would make it easy for companies to comply with and even exceed regulatory requirements. Costs would be lowered, redundant quality testing would be minimized, and profits would rise. The savings could exceed $200 billion per year. In addition, pharma could add 1.4 billion or more customers to its demand base. This would be a laudable accomplishment.

This might seem radical, but major changes are usually worth the effort. Landing on the moon was radical, but we did it.

Change is painful. The establishment usually complains and clings stubbornly to what it knows. Just consider the reaction of technicians, phlebotomists, and others in healthcare to new, automated processes that allow blood testing and some basic diagnoses to be completed much faster and at a lower cost. The Wall Street Journal recently looked at one company innovating in this area.

Pharma manufacturing and development are ripe for game-changing innovations and improvements like this. Will we seize opportunities or continue to fight them out of fear? Can we allow ourselves to imagine? "You may say I'm a dreamer, but I'm not the only one."

Increasing Profits by Reaching Pharma’s Silent Majority   August 5, 2013

Increasing Profits by Reaching Pharma’s Silent Majority


We hear a lot in pharma about the voice of the customer, but the drug industry can’t hear the voices of millions of people around the world who might become its customers. Many die each year because they can’t afford to buy the medications they need to treat their illnesses.
The pharmaceutical industry must be aware of this silent majority of global citizens. There are strong altruistic reasons for responding to them, but let's focus on a strong business case: increasing profits and restoring the industry’s troubled image.
Inflated drug prices are responsible, not only for pharma’s negative public opinion and for drug shortages, but also for depressed market demand.

Price controls or socialized solutions are not the answer.

What is needed, instead, are economies of scale, and better, innovative manufacturing technologies.

I’ve often written about these solutions in the context of improving efficiency and product quality, and reducing costs. But they’re also the key to increasing demand for pharmaceuticals.

I thought of these issues this week, when I read about India's rejection of Roche's patent for the breast cancer treatment herceptin, and the fact that Roche had previously lowered the price of the drug in India by 31%, to around $1,366 per month.

Great news! After all, the medication used to have a price tag of over $20,000 per year in India.

There’s just one slight problem: $1,366 is the annual salary for a very large portion of the country’s working class. An average middle class salary would only be about five times more than that per year. There is no healthcare insurance, as exists in the US, in India. Anyone outside of the wealthiest sectors would have to mortgage everything just to buy the medication.

Let’s analyze, rationally, pricing’s ripple effects. High prices keep medications out of the reach of many people, who content themselves with taking lower dosages of the drugs they need, or none at all. This artificially lowers demand for each drug, and keeps it low.

Lower demand, in turn, skews production forecasts, which are usually hedged on the low side anyway, to keep inventories and related costs low. When “real” demand suddenly shows up, as it can during sudden disease outbreaks, there are shortages.

Artificially depressed demand leads to insufficient global manufacturing capacities. Currently, the industry doesn’t have enough capacities, or technologies to produce active pharmaceutical ingredients and their formulations in dispensable doses, to meet the global need for essential products.

Thus, manufacturers are not prepared to meet any significant increases in demand. (Of course, the counter-argument could be made that, since the true demand for the drugs is not known, why be prepared?)

How would it be if the industry decided unilaterally, to increase its global customer base by 20 percent? That would mean an additional 1.4 billion people buying and using pharmaceuticals.

This growth is impossible to achieve using current technologies and methods.

Let’s look at one individual market sector: diabetes treatment. What would happen if just 60 percent of the diabetics in the world, roughly 370 million people, decided, or were able, to seek treatment for the condition? Insulin and other drugs are likely priced way out of reach. But if they wanted to use metformin hydrochloride, suppliers could not ramp up production of the active and its formulations to meet the demand.

Current metformin hydrochloride capacity can barely meet the needs of 60 million people. If pharma companies could supply this patient subgroup, they could add about 162 million additional customers to their customer base.

Manufacturing this drug, using the best available technology and economies of scale, would cost less than a penny per tablet.

However, today, even at Wal-Mart, the lowest-cost option still runs 5.5 cents per 500 mg tablet, well out of reach of most of the world’s patients.

In developing nations, many people cannot even afford to pay one quarter of this price for many treatments, whether for diabetes, high blood pressure, HIV/AIDs, tuberculosis, or any other disease.

Governments, including regulatory bodies, cannot and should not force drug manufacturers to supply medicines to those who cannot afford them.

But currently the industry cannot ramp up production, due to insufficient raw material availability, production capacity and manufacturing technologies, while regulators could not monitor, review or inspect the number of facilities that would result.

This means that most people in the world will never receive the medicines they need, even if more of them could afford them. And, even if the drugs did become available, there would be a time gap between demand and supply.

In this day and age, does this scenario even make sense?
What tools and technologies would make it possible for us to supply drugs to the world at prices that global citizens could pay?

Solving this problem will require brainstorming and new thinking, and a whole new business model.

Maybe it requires some basic research into innovative platforms. What are your thoughts?

It would not only boost profits but generate tremendous good will. Who in the public or private sector is willing to tackle this problem?

Letter to Indian Pharma CEOs: Have You Lost Your Chance to Innovate?


The past few months, and even the past week, have brought troubling news for some of India’s leading API and pharmaceutical manufacturers.

I am proud of my heritage and want my birthplace to succeed, so I note these problems with regret and great concern.

Just this week we read about Wockhardt’s extreme problems with data integrity and basic compliance.

We’ve already read about Ranbaxy’s contamination issues and its serious problems with data integrity.

But also this week came news of Fresenius Kabi’s cGMP and data integrity issues at its plant in Kalyani, West Bengal. The company had to recall products in May and early July, for glass particle contamination. But its Warning Letter detailed staff refusal to cooperate with FDA investigators, its doctoring data, and other frightening issues.

Yesterday, there was a press report about a “mystery pill” appearing in a batch of Cipla’s Australian subsidiary, in which lots of Febredol (paracetamol, i.e., acetaminophen) that is sold in Australia had to be recalled.

Not all that long ago, there were issues with Jubilant Life Science and Sun Pharmaceuticals Industries, as well as Orchid and Zydus Pharma. Hospira’s subsidiary in India also received a Warning Letter in late May.

When will it end?

Sadly, I fear this is just the tip of the iceberg. I know of other companies, which have not yet been named by the global media, that are likely to face challenging times ahead as they develop some plan for quality systems management.

And so, I ask Indian pharma management the following basic questions:

Is management, either directly or indirectly, conveying the message that profits are to be maximized at all costs, and preferably by having staff do as little as possible, and skirt regulations?

1. Are your company's processes so inefficient that workloads have increased to such a level that administration, documentation, and basic practices are falling through the cracks?
2. When will you move to one global quality standard for all customer bases? Some of us may not know this, but many companies have different standards for different groups of customers and different parts of the world.

3. What is seen as “not being good enough for the FDA” is seen as being quite good enough for some other groups. Juggling these multiple standards is hard work, and it’s all too easy to drop a ball and get caught flat-footed. Is that approach really ethical, and won’t it end up costing much more than it saves?

4. Does this shortcutting of quality have to do with increased competition?
5. What skeletons do you have in your closets regarding API manufacturing and formulation? Are you stalling inspectors mainly to hide them? (And, correspondingly, to the FDA: Shouldn’t you change your tactics and play a game card you haven’t used yet, to catch people unaware?)

6. What are your succession plans? They appear to be limited, which will only drive majority shareholder demands for better corporate governance. Mr. Khorakiwala, founder of Wockhardt, is 70 years old and has fought to retain control; Ranbaxy sold after a family feud; Piramal sold due to lack of succession; and there are questions at Lupin, Sun, Dr. Reddy’s, Jubilant, and Biocon.

All of these factors could affect your company’s ability to comply with regulations in the 

It would be in your best interests to answer these questions for yourselves, before you
find your profits gone and your market share taken by companies with strong process
technologies and a desire to, not only meet, but exceed global quality regulations.

In 2005, India’s generic pharmaceutical companies changed the world’s playing field. They could have shown how it is possible to improve efficiency, reduce costs, and exceed minimal regulatory standards.

However with the current increasing citations, it seems they have squandered opportunities to innovate in API manufacturing and formulations, and perhaps even in biosimilars. Is it too late?

Can Gates/Clinton Save Pharma? June 24, 2013


In the pharmaceutical industry today, the predominant mood is one of negativity. General discussion in the press focuses on drug shortages, recalls due to quality problems, or contamination or problems with new drugs and clinical trials. The average reader understands these topics as they relate to him or her.

Even in the publications geared to industry professionals, and presentations at industry events, the overall focus seems to be on risk mitigation, rather than on proactively doing whatever will result in better product quality.

What's missing is any discussion about active pharmaceutical ingredients (APIs), the most important element of a drug, and their manufacturing and formulation. Is it due to our lack of understanding or our inability to create repeatable processes? APIs have become the orphans of the industry, even though they cure diseases and keep us healthy and alive.

Regulations have been proposed that will cause API supply disruptions and force some manufacturers out of business.

Is this a bad thing? Clearly, we are spending a great deal on API production and formulation, and are doing so very inefficiently. This inefficiency results from lack of economies of scale and some of the time and effort that is spent by every company in bringing a generic drug to the market, and subsequent testing during production. And yet, such testing offers no guarantee that quality will be achieved, as we've seen with the recalls.
Having many companies produce the same generic drug not only affects R&D and manufacturing, but has an impact on the entire supply chain, including the APIs and excipients that are used in formulation. This is also true for brand drugs.

Each company buys its APIs and excipients from different suppliers. Lack of economies of scale also raises regulatory burden on both sides of the fence.

Overall, we are raising costs. Customers do not know this, and many might not care, as they are willing to pay more for what they perceive to be valuable. However, the industry's inefficiency affects those, such as the uninsured or those on fixed incomes, who must often choose between food and medicine.

Besides pharmaceuticals are there any other businesses today where inefficiency costs are passed on to consumers? Regulatory bodies developed current good manufacturing practices (cGMPs) to maintain basic levels of product quality. But, if we look at cGMPs, they are neither current nor good, and yet, they appear to be challenging some of the world's largest pharmaceutical manufacturers today.

If companies were crossing every "T" and dotting every "I" there would be minimal citations and/or recalls.

Profitability has assured a culture where inefficiencies are ignored.
Increased competition could turn this situation around. Yes, it will mean that some companies won't survive, but perhaps they shouldn't be in business anyway. Reducing the number of companies producing the same drug would bring economies of scale. This, in turn, would reduce the development time, time to market, improve the overall business process, reduce regulatory workload, and result in safer and more sustainable API and formulation processes.

Who will bring about the “creative destruction” needed for this to take place? Only organizations that challenge the status quo can bring real change.

Foundations, including those established by Bill and Melinda Gates and Bill Clinton, along with various governments, have been helping many in developing countries secure drugs for neglected tropical diseases (NTDs) and HIV/AIDS. They have already succeeded in reducing the prices for some drugs, compared to prices in the developed countries. However, there is still room to lower drug costs (about 30 to 45 percent) through better manufacturing technologies and economies of scale.

Since these foundations have already worked with pharma companies, they could be the ideal change agents. Initially, they would have to focus on a few selected APIs and their formulations and a select group of manufacturers, to show what might be possible with better technologies. Each success would extend the reach to an additional 20 to 30 percent of people living in any given region without the need of additional funding. Success with these drugs could then gradually spread across the total pharma landscape.
Such efforts would improve profits and lower healthcare costs across the board.
There could be short-term disruptions, but long-term, everyone would benefit. Lower costs would increase drug usage, and a 10 percent global drug use increase could add about 600 million people to the industry's customer base.

What will it take to pay attention to the orphans of the pharmaceutical industry? Total business processes (drug development, manufacturing process development, commercial manufacturing methods, and supply chain) will be impacted. Again, the potential savings could account for 25 percent of the global revenue. Such savings would lower overall healthcare costs. Now, that would be something to cheer about.

QbD on the Menu at CPhI Mumbai: Industry Savings of $200 Billion Possible 
June 19, 2013
The air was full of three-letter acronyms at CPhI's recent conference on process analytical technology (PAT) and quality by design (QbD) in Mumbai. QbD even found its way to the dessert trays.

These quick and dirty on-site photos come courtesy of Girish Malhotra, a CPhI PharmaEvolution blogger.

Malhotra was in Mumbai to lead a session and to present two papers on important topics: Using QbD to Improve API Manufacturing and API Process Simplification. His presentations included real-world data and examples of APIs and the processes used to make them. One major quality obstacle has been the fact that processes for new APIs must be shoehorned into manufacturing equipment that often is not optimized for them. This results in inefficiency, he said.

Some highlights from his papers: Pharma is still mired in a quality-by-analysis mindset, and it passes on the cost of inefficiency. Since the public is willing to pay a premium, and profits are still strong, many manufacturers ask why they should change the way they do things.

Unfortunately, this has resulted in lack of command over processes, as well as manufacturing and supply problems. The industry still suffers from low process capability, he said, citing figures from a 2001 (pre-PAT) FDA Science Board meeting. 

Utilization levels are 15 percent or less. Scrap and rework are routinely planned at 5-10 percent, and the cost of quality is more than 20 percent. Savings from QbD could exceed $160-$200 billion a year for name-brand and generic drug manufacturing, Malhotra said.

In addition, lack of "first-pass" quality lowers overall industry profits by 20-25 percent. He cited the example of Nevirapine; the variability in its prices stems from the fact that it has too many plants and focuses on batch processes and quality by analysis.

In his presentation on API simplification efforts, Malhotra discussed the economic benefits of reducing process steps and taking such basic measures as minimizing solvent and reducing raw material requirements. He cited both Modafinil and diazo compounds. The industry continues to use low-temperature processes for these, he said, even though advanced heat exchange technology is available.

Is It Time to Revamp cGMPs? May 29, 2013

Improving APIs & Formulation: Are You Harnessing the Power of Liquids? May 14, 2013


Liquids are an essential part of our planet. Imagine our landscape and lives without them. We may take them for granted, but liquids play an important role in the reactive processes that produce small molecule active pharmaceutical ingredients (API), as well as in pharmaceutical formulation.

When we consider any chemical reaction in the laboratory, the very first thing we do is review the physical and chemical properties of each reactant. This is where our formative knowledge of the reaction begins. Some of the reactants are liquids, others are solids, and some may be gases at room temperature. A catalyst would be needed.

Proof of concept and most of the initial work is done using available labware. Liquids are the easiest to handle, and their flow can be easily controlled. Solids are typically dissolved in a solvent to facilitate handling. Gases are the most difficult to handle as a liquid in the laboratory.

Safety, conservation, and toxicity considerations also begin at this point. We should keep the related issues in mind but not dwell much on them as necessary provisions are made when the process is commercialized.

Our focus is on proving the feasibility of the reaction with the highest yield. Laboratory and scale-up experiments are done on a small scale, and may not allow use of raw materials in their actual state. If they cannot be used in their actual state, we solute them in a compatible solvent.

With process feasibility proven, our focus then shifts to marketing the product. As we progress from the lab to the pilot plant to commercial scale, we continue to use most of the methods and habits that we practiced in the lab and pilot plant.

But what happens when raw materials or conditions change in the real world?

All too often, a relentless focus on speed to market prevents us from going back to the lab, and so we fail to capitalize and/or exploit the “sociochemicological” behavior of reactants and reaction products.

Our intuitive failure to recognize and capitalize on the behavior of chemicals results in an incomplete understanding or control of the process, preventing us from developing the most innovative process. We miss out on opportunities to improve productivity and sustainability, which often translates into loss of competitive advantage via lower cost or higher profit.

Consider a raw material that is a solid but has a low melting point. In the laboratory, we dissolve it in a solvent and complete the reaction.

If the reaction products are liquid at room as well as at reaction temperature, which is above the melting point of the key raw material, we could use the liquid state of the reaction products to our advantage. We could take advantage of the formation of liquid products to lower the total solvent requirement. Solvent reduction can translate into a 10-25 percent productivity improvement. This is significant. Lower solvent requirements translate directly into lower overall investment needs.

Behaviors of chemicals are unique. Used creatively, they can help us innovate and simplify, while putting us in command of processes. However, we must first recognize the opportunities and take advantage of them.

Additional reading
Chemical Process Simplification: Improving Productivity and Sustainability, John Wiley & Sons. 2011

Product Volume & API Process Optimization: Connecting the Dots May 2, 2013


To the uninitiated, active pharmaceutical ingredients (APIs) look like wiggly, leafless branches, but they can treat diseases. Selected chemicals are reacted to produce the desired effect. The manufacturing processes can be complex. Our job is to create processes that are as simple and environmentally friendly as possible and result in products that meet quality specifications all the time without much interference.

The most important factor in any API business process is the volume of product required to meet global demand. It determines manufacturing process design, equipment selection, and asset utilization, and it influences the overall supply chain.

Traditionally in the chemical industry, product volumes are large enough to warrant producing large quantities at multiple plants. However, pharmaceutical APIs present a different scenario. This needs to be understood and explained.

Since active ingredient dosages can vary from fractions of a milligram to a few hundred milligrams, the total amount of API needed can vary from a few hundred to thousands of kilograms per plant per year. We have to recognize that one kilogram of active ingredient at 100 percent formulation efficiency will produce 1 million tablets with a 1mg dose. Pharma's API needs are very different from the need for fine and specialty chemicals. There are limited numbers of active ingredients that are needed in millions of pounds per year.

Consider an API with a global need of about 20,000kg per year. With the right process and equipment, this could be made at a single plant. However, the reality is very different. This product could be produced at multiple sites while it is still under patent. When it becomes generic, many companies could be producing it, so production per site can be even lower.

If the active ingredient is to be produced at more than one plant, there will very likely be equipment that does not suit the process chemistry. As a result, the process must be adjusted to fit the equipment. Raw material and solvent costs, supply, usage, and handling will be different at each site. Processing conditions and the physical state of raw materials will impact the time it takes to produce the same quality product. Isolation of reaction intermediates and side products will also be different.

It is very likely that the process yield will be different; most likely, there will be processes that are inefficient and unsustainable. Since there will be product campaigns, the regulatory compliance workload will increase. Equipment cleaning and cGMP compliance will be a challenge. One can comfortably conclude that the factory costs will be different at each site. Since the processing conditions will be different at different plants, companies will have to rely on repeated analysis at different stages of production to ensure quality. In other words, they will be relying on the outmoded Quality by Analysis that still rules at most pharmaceutical facilities.

Producing this API at a single plant would result in a much more efficient process, offering benefits in areas such as raw material costs, handling, and supply chain control. It would use significantly less solvent, would simplify regulatory compliance, and (if the process were properly designed) would result in a quality product. The process dynamics of a single plant will be simpler, and the profits will be much higher.

Rhetorical question: Why does pharma persist in manufacturing APIs in different facilities?

My next post will discuss which physical properties can be exploited to optimize API processes and how.

Sociochemicology April 9, 2013

Girish Malhotra explains "Sociochemicology," how to exploit chemical properties to optimize API development, and the potential savings involved, all in under three minutes!

The Secret Life of APIs: The Importance of Sociochemicology April 4, 2013


When we produce a small-molecule active pharmaceutical ingredient (API), we have to pay close attention to its manufacturing process and quality systems, giving these much more scrutiny than we would for other synthesized chemicals. After all, APIs have the potential to improve our health or extend our life, where chemicals merely facilitate our lifestyles.
Thus, for API manufacture, we must have complete command of what we do. First-time quality has to be the way of life and our goal. Anything less than a quality-by-design (QbD) approach will add cost to the product.

Each chemical involved in the API manufacturing process is either a reactant, solvent, intermediate, or byproduct, and each has its own physical and chemical properties (for example, physical state, molecular weight, density, phase transition temperatures, solubility in water and other chemicals, viscosity, surface tension, and heat of formation). Some APIs are converted to a salt for easier dissolution, improved efficacy, and performance.
Each also has its own toxicity and toxic behavior when interacting with other chemicals. Since chemicals, like animals, have individual and collective behavior I call this behavior “sociochemicology.”

I'm not trying to oversimplify what all chemists and chemical engineers learn. However, we often seem to fail to account for the individual and collective behavior of constituents in our APIs. QbD becomes second nature when we understand and manage the behavior of chemicals that are used in the manufacture of active ingredients and formulations.
With this knowledge, we can manage, juggle, manipulate, maneuver, and even coerce behavior to develop a process that will produce quality product from the onset -- i.e., achieve the goals of QbD.

Such processes will be simple. We will have command of each reaction step and, collectively, for the whole process. In addition, the resulting process will offer the highest product yield.

Chemists and chemical engineers use sociochemical properties to select the desired chemicals for specific reactions. This information also allows us to have a safe starting point for reactions. We can use our knowledge and imagination to alter their behavior to our advantage. Understanding collective behavior of chemicals is important, because it allows us to handle them safely and properly in a process. It also gives us clues about how to manipulate and modify their relative amounts and reaction conditions to achieve the highest product yields, and the most economical and sustainable processes.

We can use sociochemicology to optimize process chemistry and operating conditions. Design of experiments should be used for optimization.

Reactivity and behavior can also be used to simplify addition point and method. Mutual solubility or lack of it, for instance, can facilitate phase separation or the removal of a desired product from the reaction mass. Solubilities also assist us in minimizing the number of solvents used. Process conditions can be used to influence reaction rate, flow, and solvent amount. Productivity, investment, and product cost are influenced. Physical state guides us to select the best flow control method. Clear liquid is the easiest to control, with gas being the hardest. Exotherm is best controlled using a heat exchanger vs. adding water/solvent or ice to the reaction mass.

Understanding of sociochemicology helps developers exploit unit operations to create economical, sustainable, and safe processes.

If we follow these basic principles, we have an opportunity to exceed regulatory guidelines in every step of API synthesis.

Additional reading:

¥ Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability, ISBN: 978-0-470-48754-9, January 2011, John Wiley & Sons Inc.
¥ Malhotra, Girish: Focus on Physical Properties to Improve Processes: Chemical Engineering, Vol. 119 No. 4 April 2012, pgs. 63-66

The Secret Life of APIs February 26, 2013

Active pharmaceutical ingredients (APIs) make the pharma world go 'round. Without them, any finished drug would be a mere placebo.

So why is it that 99 percent of the discussion taking place about pharmaceutical quality by design (QbD), process analytical technology (PAT), and other “new” methodologies (actually, there’s nothing new about them, and those of us in the know have been using these methods for at least four decades, but I digress) focuses on finished drug products, and leaves APIs out entirely?

In this blog series, I’ll try to right this wrong.

My goal is to share my views on the API value chain and the issues affecting their development, manufacture, and distribution. How might we develop and manufacture APIs at minimal cost and optimal quality, the first time and all the time?

In other words, I’ll explore how we can bring a QbD approach to the API world.

First, we have to accept the fact that QbD is not a technology toolkit (I’ve been horrified by the number of articles I see describing QbD as a technology platform!) but, rather, a disciplined way of incorporating the fundamentals of chemistry and chemical engineering. Done right, it will create a process that yields quality product consistently, and despite variations in raw material sources, but will meet established quality specifications.

Through these posts, I’ll present my view of the ideal path to consistently safe and high-quality APIs. Some readers will disagree with my views, and some will have better ideas. I hope that you will share them! My intent is not to challenge, but to review a process that will be required if we are to continue to produce quality products, consistently, at the lowest cost, using sustainable and safe processes.

Surely our creativity, imagination, and ingenuity will allow this to happen. But this process can’t just start at the end of the chain. It must start with the API, which, after all, defines each drug.
First, let’s quickly review API manufacturing. Active content in a tablet ranging from fractions of a milligram to hundreds of milligrams results in variable annual demand for APIs (from a few to more than 100,000 kilograms). In isolation, these numbers might not mean much, but they are critical in process design and production planning.

Unfortunately, other things get in the way, too, particularly the reliance on “Quality by Analysis,” or the common practice of analyzing every step of a reaction process to ensure that the process is progressing as expected. This “Analysis Paralysis” approach is already inefficient. But it stifles innovation and creates ripples of inefficiency in other business areas, including how we manage our supply chains and use capital equipment and other assets.

Under “AP” mode, our focus is on complying with regulations for safety, health, and the environment, rather than optimizing our processes so that they exceed regulatory expectations and enable continuous improvement.

As engineers, chemists, and other trained scientists, we learn the fundamentals that allow us to use QbD methods to design processes. However, we still don’t incorporate them fully into day-to-day operations. This isn’t because they’re not good ideas, but because business practices blind us to the need to optimize.

At a time when blockbusters (drugs whose annual sales are a billion or more dollars) are coming off patent right and left, why are we are still stuck in the mindset of finding and developing new blockbusters? Some new drugs, recently approved by FDA, serve only 3,000 patients worldwide.

In the early 20th century, demand was focused on the developed nations. Patents could be fully enforced, and there was minimal threat from developing nations.

Since the single API volume per site was generally low, it made sense to manufacture the APIs in batch mode, using the same or similar equipment that was used to produce non-drug products and fine or specialty chemicals. There was minimal consideration about the manufacturing technologies, because the costs related to inefficiency and regulatory compliance could be passed on to the customers. Profits were high, as the pricing was based on need rather than competition.

In the early 2000s, the playing field began to change. With patents expiring or being challenged, more countries placing price controls on pharmaceuticals, and new drug pipelines drying out, many companies are scrambling to prop up their balance sheets. One way they do this is through acquisitions, an unproven strategy that often yields only short-term results. Acquisitions are not going to increase pharma's new drug development success rate.

Business realities are changing rapidly today, and pharma must capitalize on opportunities that it has been ignoring for decades. The time has come to bring innovation to both API and finished drug manufacturing, and to bring more jobs back onshore, whether that shore is North America, Europe, or (as costs of doing business there continue to increase) China or India.

Are you with me? We will follow this with a brief questionnaire to help us discuss and shed more light on current practices in the industry. Look for it next week!

Additional Reading:

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