In 2005 I had raised a question about Batch
or a Continuous Process: A Choice. At that time it seemed like a logical
question and still is. However, I left part of the question unanswered. Missing
was the discussion of components of pharma manufacturing, API manufacture and
their formulations. Generally most of the discussion about pharma manufacturing
focuses on formulations. API manufacturing is treated as an orphan and is not
discussed.
In this discussion I have used Synthroid, # 1 prescribed and
# 59 by revenue drug from top
100 US drugs from 2013 to review both segments of manufacturing and related
options. Information could be used to create a better business model that will
incorporate better manufacturing technologies and move away from ‘regulation
centricity” to “process
centricity”. End result would be improved profits and expanded global
healthcare and coverage with lower costs. If properly done global
pharmaceutical landscape will change.
API manufacturing and their formulations need to be dealt
separately as the technologies involved (unit processes and operations) are
different. However, they influence the total business process. First has
reactive processes along with purification. Resulting products could be solid
or liquid. Formulation in the simplest form is basically mixing of excipients
and creating dose that delivers the expected performance and can be easily
dispensed and consumed. Packaging is part of the formulation.
Why Continuous
Manufacturing of API’s would be a challenge:
In
the last few years many on increasing frequency have chimed in for the
continuous processes for API. However, it seems like that the rational
principles of chemical engineering have not been applied in coming to that
conclusion. Continuous usually
means operating 24 hours per day, seven days per week with infrequent
maintenance shutdowns, such as semi-annual or annual. Generally 15% downtime is acceptable. Anything
short of this definition is not a continuous process. Continuous process also
means starting with raw materials and producing finished salable product.
The following
dictate the rationality of what type of process would produce lowest cost and
highest quality products.
- Product volume per year
- Process
- Equipment
In
the development of a commercial process chemist/chemical engineer have to know and
understand these. They can have the best process but equipment and product
volume dictate the course of action. Generally the first thought is to use the
existing equipment if the volume does not justify a continuous process. We all
know and understand that a continuous process most of the times means capital
investment.
For
batch or continuous process complete command of the operating conditions and methods
is necessary to produce repeatable quality product. Anything short impacts
product quality and business process.
Batch
cycle time exceeding e.g. 48 hours necessitates a thorough review and effort even
going back to the lab bench to reduce the cycle time. Long batch processes
impact asset utilization and the whole business process. Every effort needs to
be made to minimize the batch cycle time. In pharma extended API manufacturing
batch cycle times are normal as there is no “process centricity”. “Regulation
centricity” rules and is an impediment to innovation.
Table
1 is self-explanatory and presents very interesting numbers. There are some
extrapolating assumptions. It is assumed that 5% of the global population uses
synthroid. This most likely is a high number. Thus the actual demand for the
active ingredient would be less than illustrated.
Table
1 illustrates that at 112 microgram dose at 100% formulation efficiency about 15,000
kilograms of the active would be needed to satisfy the global demand. A
continuous API plant operating [24X7X350x0.85 =7,140 hrs.] would produce at about
five pounds per hour, an extremely low production rate for a continuous process.
Use of currently available equipment would pose many challenges and be really
trying to fit square plug in a round hole. If a continuous process plant were
to be built, it will require special equipment and process controls that might
not be available.
All
said and done there is no justification to have a continuous plant for the
manufacture of active Levothyroxine (synthroid). I have not looked into it but
I am sure that today multiple plants are producing the active ingredient. Each
possibly has low process yields, are inefficient, have variable site to site
and batch to batch product quality. Significant and expensive manpower would be
needed to have consistent quality product. In reality a single plant using a
batch process would satisfy total global demand.
Synthroid
(Levothyroxine)
sales number and prescriptions [Table 2] presents another interesting hypothesis.
We can reverse calculate the price of the active ingredient. It would be based
on certain assumptions and would give us a picture of profitability at different
levels. US sales per prescription per month are about $3.05. These
compare to sale price of $4.00
for thirty or $10.00 for ninety day supply at Walmart and Target etc.
2013 Sales, $
|
2013 # prescriptions
|
Dosage
| |
858,725,708
|
23,452,848
[One prescription per person]
|
There are eleven different doses between (25-200 microgram) available. To facilitate calculations an average dose of 112 micrograms has been used.
| |
Since synthroid has to be taken every day of the year we can calculate the total micrograms needed assuming 100% formulation yield. One prescription = one patient
| |||
Total API needed, micrograms per yr.
|
=23,452,848x112x365= 958,752,426,240
| ||
One kilogram = 1,000,000,000 micrograms
| |||
Total API needed to serve US population, Kilograms per yr.
|
958.75
| ||
US population taking Synthroid
|
(23,452,848x100)/320,000,000* = 7% [*US population]
| ||
Extrapolating number to project global Synthroid API demand per year
| |||
Global population seven billion. Assumption 5% takes synthroid = 350,000,000
| |||
Total Synthroid global API need Kg. per year
|
=(350,000,000x958.75/23,452,848) = 14,308
| ||
Table 1: Levothyroxine active ingredient needed for Global and US population
Sales, $
|
# Prescriptions
|
858,725,708
|
23,452,848
|
Avg. US patient cost $ per month =
858,725,708/(23,452,848x12) =3.05
|
|
Avg. dose, micrograms =112
|
API, Kg needed to fill US need = 958.75
Per Table 1
|
Profit assumption at wholesale level
|
100%
|
Sale price at wholesale level, $
|
= 0.5x858725708 = 429,362,854
|
Formulation profit 40%
|
|
Formulation level factory cost
|
=0.6x 429362854 = 257,617,712
|
Excipient and conversion cost
|
70% of Factory cost
|
Total API Purchase price, $
|
= 0.3x257617712= 77,285,313
|
API Selling price, $ per kilo
|
= 77,285,313/958.75= 80,610
|
Table 2: Reverse calculation
of Levothyroxine
selling price
Reverse
calculation using US sales numbers suggest that active ingredient Levothyroxine
cost to the formulator should be about $80,610 per kilo. Current selling price
of levothyroxine on the world market is less than $3000 per kilo. This suggests
even after generous profit margins being factored in Table 2 everyone in the
supply chain has significant profits. These margins also indicate that all of
the inefficiency costs can be passed on and there is no incentive to improve manufacturing
practices. Average sale price of $3.05 per month would considered low by US
standards but it might be considered expensive in the developing countries even
when it is sold at $1.00 per month’s supply.
Formulation Processes
Since dosages are in micrograms or milligrams, one kilogram
can go a long way. One kilogram can make one million of one milligram and one
billion of one microgram tablets at 100% yield. It tells us that a large volume
of high value product can be produced from a small quantity. Using 10,000
kilograms Table 3 illustrates different production rates. At 100% yield we can produce
ten billion of ten milligram or 10,000 billion tables containing one microgram
active ingredient.
Tablet dose
|
10 milligram
|
100 microgram
|
10,000 Kilogram
|
10,000,000,000 Milligram
|
10,000,000,000,000 Microgram
|
# Tablets
|
1,000,000,000
|
100,000,000,000
|
Hours per year using 85% operating time
|
=350*24*0.85= 7140
|
|
Minutes per year using 85% operating time
|
=7140*60= 428,400
|
|
Tablets production rate per minute
|
=1,000,000,000
/428,400 =2,334 |
=100,000,000,000
/428,000 =233,426 |
Production rate Synthroid, 112 microgram tablets per
minute
|
=233,426*1.43/1.12
=298,202 |
Table 3: Formulation
production rates
Review suggests that a single plant could produce the necessary
active ingredient to fill global synthroid demand. However, it would take
multiple tableting lines/sites to convert the active in salable product. Since
multiple doses are needed it would be worth to have parallel tableting lines. Multiple
lines would give flexibility to meet the customer demand.
Very precise and high degree of process control is needed at
every step in each line. Various technologies to produce and package tablets
exist. Blending of excipients and actives to deliver a uniform product
requires precise controls.
Analysis:
Point of this exercise is not to suggest that continuous
processing is dead. Each manufacturing component has to be looked at separately
to see what is the best for business and patient base. Going continuous for
formulations is much easier than for API. Basis is ONE kilogram active
ingredient can produce ONE million one milligram tablets that will serve about
27,000 patients per year at one milligram dose.
Many companies produce same API. Processes for these APIs
are generally inefficient. Square
plug in a round hole scenario for such molecules will exist unless a
concerted business effort is made to alter the landscape through consolidation.
If we look around, out of thousands of small molecule drugs may be less
than ten APIs are produced using continuous processes.
Going from “B”(batch) to “C” (continuous) is not like going
to the next alphabet. It will require a significant change in business thought
process. Omeprazole,
metformin hydrochloride and HCTZ (hydrochlorothiazide) are some APIs that could
be produced using continuous process. For that matter any API that has a global
requirement of more than 350,000 pounds per year could be produced using continuous
process. Breakthrough chemistry and brilliant execution would be needed. Use
of any API that is produced at these volumes (350,000 pounds per year or more) suggests
that their consumption could be increased if costs come down. Pharmaceutical is
the largest business segment where cost reduction can increase consumption by
20-30% i.e. by billions.
I am
not giving up hope for continuous processes. I hope you don't either. It will
take effort.
Girish
Malhotra, PE
President
EPCOT
International
No comments:
New comments are not allowed.