Bring Pharmaceutical Manufacturing Back to USA: Additional Thoughts and Recap

This blog post recaps some of the ideas that have been proposed in the recent past and also presents some additional ideas to bring pharmaceutical manufacturing to USA. Task at hand is a challenge as many vested and personal interests that can be a major hurdle to produce active pharmaceutical ingredients (API) and their formulations in the United States of America ⁽¹⁾. Perspective presented in my own and devoid of any financial relationship with any profit or non-profit making entity. 

Recap:

Every profit making company will manufacture their products in the country where they can maximize their profits. In the last twenty five years US API producers and their formulators could not compete with imports from overseas as the US based manufacturing companies could not give the pharmacy benefit managers and insurance companies the levels of profits overseas companies could give. In addition, companies instead of innovating manufacturing technologies to deal with challenges posed by the environmental laws to preserve the eco systems opted to partner with companies that had to deal with less stringent environmental laws. These could have allowed them to capture the ever growing global markets ⁽²⁾. Consumers (patients) in the developed countries became dependent and addicted to the lower generic drug prices passed on by the companies that came from not proving bioequivalence and much less stringent environmental compliance laws. 

New considerations to bring generic pharmaceutical manufacturing: 

Ators mentioned in earlier post ⁽¹⁾ also need to consider the following if manufacture of pharma has to be brought to the United States. 

1)     Financial Incentives: Any company establishing a pharmaceutical manufacturing plant in the US should be given a TEN year tax benefit. This would be a great incentive to have a pharmaceutical (API and formulation) plant in US. Companies would lie to get this advantage.

2)     Level the playing field: Environmental Laws: Any imports of generics to US have to comply with US environmental laws at producer’s manufacturing sites ^{(3, 4, 5)}.

3)     Eliminate the Formulary lists: If a drug is approved by FDA, it means it is a useful drug for the disease, rather than being selected by PBMs (Pharmacy Benefit Manager) who are in the name of getting the best price benefiting from buying and selling.

4)     Direct Marketing to Patients: Let the pharma manufacturing companies do direct selling to patients through approved channels ^{(6, 7)}. This will bring in competition and quality, a normal expectation, through use of best technologies which has eluded pharmaceutical manufacturing. 

Recent Blog Posts:

1)     Product Quality: Any company and that includes every PBM or their agent or direct/indirect importer of generic drugs in the supply chain product quality non-conformance has to held accountable through ban of sale of such products in the US. If the product does not meet the established quality as approved by US FDA and agreed by the ANDA filing company its approval should be withdrawn ^{(1, 8, 9)}. No 483 should be issued.

2)     ANDA Approvals: Any company wanting to produce generics in US should have their ANDA review and approval done in THIRTY DAYS ^{(1, 9)}. This will be a task as US FDA will have to change its modus operandi. If FDA cannot accomplish this approval timetable and stay with the current model, there is no incentive to invest in manufacturing USA.  

It should be our expectation that our legislators and regulators (ators), who claim to be really serious about continued supply of drugs and healthcare (PPE, personal protective equipment included), will find pathways to accomplish and serve the strategic needs of the United States of America unless they are influenced by vested interests. Pharmaceutical companies will have to be proactive and compete for the market and profits. PBMs will be an interference as their profit landscape could change if direct prescription sales come to fruition. Regulators could find their influence curtailed. 

Creativity and imagination would be needed if US wants to bring pharmaceutical manufacturing home e.g. in the next 365 days. 

Girish Malhotra, PE

EPCOT International

1)     Malhotra, Girish: Euphoria to Bring Pharma Manufacturing Home to United States its Reality and Challenges, Profitability through Simplicity, May 23, 2020

2)     Malhotra, Girish: An Alternate Look at the Pharmaceutical World Revenues and Drug Affordability, Pages 2-5, CPhI Annual Industry Report, 2017

3)     Malhotra, Girish: Can Uniform Safety, Health and Effluent and Manufacturing Standards Create Process Technology Innovation and Competition in Pharmaceuticals? Profitability through Simplicity, January 10, 2017

4)     Malhotra, Girish: Why Have the Fine and Specialty Chemical Sectors Been Moving from the Developed Countries? Profitability through Simplicity, February 9, 2009

5)     Malhotra, Girish: Pharmaceuticals, Their Manufacturing Methods, Ecotoxicology, and Human Life Relationship, Pharmaceutical Processing, November 2007 

6)     Malhotra, Girish: Improving Drug Affordability for the United States Populous through Alternate Business Models, Profitability through Simplicity, May 4, 2018

7)     Malhotra, Girish: Could Amazon (A), Berkshire Hathaway (B) and J.P. Morgan Chase (M) be the Anti-Ballistic Missile (ABM) needed to Control/Curb Rising Healthcare Costs? Profitability through Simplicity, February 9, 2018

8)     Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2019

9)     Malhotra, Girish: Strategies to Increase Generic Drug Competition and Bring Manufacturing to The United States of America, Profitability through Simplicity, March 16, 2020 

Euphoria to Bring Pharma Manufacturing Home to United States its Reality and Challenges

With COVID-19 amongst us suddenly every “ator” (legislator, regulator, litigator, educator, political operator, news investigator, did I miss any other) has become a policy wonk and has proposals to bring pharmaceutical manufacturing home. It is interesting that many of these “ators” have never designed, developed or seen a manufacturing plant let alone a pharmaceutical plant ^{(1,2, 3)}. Some have noble thoughts but it is not like waving a wand or twitching a nose and plant making desired active pharmaceutical ingredients (API) and their formulations will appear. Some of the “ators” at regulatory bodies ⁽⁴⁾ and educational institutions (too many to name) are even talking about advanced manufacturing technologies which they know nothing about as they have never developed, designed, commercialized such technologies at profit making enterprises. We need to be skeptical and take all of the euphoria with grain of salt and tread through the maze carefully as the task at hand is not that easy as it sounds. I am presenting my perspective and have no financial relationship with any ators or any other nonprofit and/ profit making entity. 

Since WTO (World Trade Organization) agreement US has increasingly relied on outsourced medicines. If just thinking that a manufacturing plant will appear overnight and make USA self-sufficient in pharmaceuticals then we all are living in an unreal and a make belief world. Suddenly COVID-19 brought a rude awakening home that US cannot supply its populous many of the generic drugs and faces strategic and national security threat ^{(5, 6)} and suddenly every policy wonk (ator) as stated earlier has a proposal to remedy the situation overnight. 

Unfortunately, it is not easy to accomplish task at hand overnight and even in one year. In order to accomplish success many stars have to align and many established and stodgy policies will have to change. Many are the mainstay of FDA’s day to day working. Skeptics, procrastinators, Monday morning quarterbacks, would not be needed. Mover and shakers and can doers would be extremely useful. Lots of fiefdoms and kingdoms will have to accept change. 

In order to bring pharma manufacturing home FDA would have to re-write its ANDA review and approval policies. First and foremost being it has to create processes to get ANDA approval in 30 days if a company establishes a manufacturing plant to produce quality drugs in USA ^{(7,8, 9, 10, 11)}. FDA is going to resist change as it will loose its stranglehold on pharma companies. However, it can still hold pharma companies accountable for by shutting them down if they cannot produce quality at first inspection or random sampling of their product from the market place ⁽⁶⁾. 

In addition to FDA changing its approval procedures, many other things have to happen and done by the pharma manufacturing companies. They have to create processes that can be fitted in any existing plants in the United States. It will be challenging task. Fitting a square plug in a round hole is not a simple as it sounds ^{(12, 13, 14, 15)}. Significant effort would be needed to fit the processes in existing equipment. Even with availability of plants engineers will have to figure out and prove that their process modification and innovations would deliver quality products. We don’t have time for grass root plants. 

Since pharma product is a two-step process, API manufacture and their formulations, it is an excellent opportunity to develop realcontinuous formulation operations. Equipment technologies have existed for over 60 years but my conjecture is that most equipment vendors have stood in the way of such formulation processes. This is more due to fear of engineers at pharma companies not having experience, creativity and imagination to design, develop and commercialize excellent processes that will deliver quality product ⁽¹⁶⁾. Vendors need not hold hands of clients. This not any accusation but a reality. API except for few products do not have the product volume to be produced under established continuous process definition ⁽¹⁷⁾. 

Existence of FDA is a must. It should set policies and expectations. Let the companies deliver what it expects rather than telling how and what. FDA has to let the companies innovate rather than telling them what is good for them. If the companies don’t know that then they should not be in the manufacturing business. Engineers excel in what they develop, design and commercialize. Babysitting of companies has to stop. If companies don’t live up the expected minimum after one iteration, they should not be given 483 citation but shut down. 483 have become a medal of honor ⁽¹⁸⁾ for the companies. PBMs (pharmaceutical benefit managers) will have to restrained as their profits are going to be impacted. If not restrained, US population will see drug prices go up. 

If US can send the man to the moon and bring him back, bringing pharma manufacturing home is lot easier. If companies get started to bring manufacturing to the United States today, it will take time, effort, creativity and imagination to deliver. We have to acknowledge that US does not have sustained availability of raw materials to produce the necessary drugs. There is lot needed than just saying let’s bring pharma manufacturing home. It won’t happen in a blink. US needs lot of luck. 

Girish Malhotra, PE

EPCOT International 

1. Rosebush, Lee, Outsourcing U.S. Drug Manufacturing to China was a Mistake—A Lethal One | Opinion, Newsweek, May 5, 2020, Accessed May 22, 2020
2. Gibson, Rosemary, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, U.S.-China Economic and Security Review Commission, July 31, 2019, Accessed May 22, 2020
3. A Blueprint  For Enhancing the Security U.S. Pharmaceutical Supply Chain, April 2020, Accessed May 22, 2020
4. US FDA, CDER, OPQ  
5. Malhotra, Girish: Health and National Security Issues for the USA and Is The United States of America Prepared, Profitability through Simplicity, May 8, 2020 
6. Malhotra, Girish: Strategies to Increase Generic Drug Competition and Bring Manufacturing to The United States of America, Profitability through Simplicity, March 16, 2020 
7. Malhotra, Girish: Long Term Drug Quality Supplies for US, FDA and A New Reality, Profitability through Simplicity, April 3, 2020
8. Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2019
9. Malhotra, Girish: Impact of Regulations, Drug Manufacturing and Pharma Supply Chain (PBMs and allies) in Drug Shortages and Affordability Part 1, Profitability through Simplicity, March 8, 2019 
10. Malhotra, Girish, Impact of Regulations, Manufacturing and Pharmaceutical Supply Chain (PBMs) on Drug Shortages and Affordability Part 2, Profitability through Simplicity, April 3, 2019
11. Malhotra, Girish: What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days?, Profitability through Simplicity, October 24, 2018
12. Malhotra, Girish: Square Plug In A Round Hole: Does This Scenario Exist in Pharmaceuticals?, Profitability through Simplicity, August 17, 2010
13. Malhotra, Girish: Why Fitting a Square Plug in a Round hole is Profitable for Pharma and Most Likely Will Stay?, Profitability through Simplicity, August 1, 2014
14. Malhotra, Girish: A Radical Approach to Fine/Specialty API Manufacturing, Profitability through Simplicity, January 20, 2010
15. Malhotra, Girish: The Good, The Bad, The Ugly (1) Complexities of Pharmaceutical Manufacturing, Profitability through Simplicity, April 8, 2018
16. Vanhoorne, V, Vervaet, C: Recent progress in continuous manufacturing of oral solid dosage forms, International Journal of Pharmaceutics, April 15, 2020, Accessed May 20, 2020
17. Continuous Production,  Wikipedia
18. Malhotra, Girish: Are US FDA 483 Citations a "Medal of Honor" or “Rite of Passage” to Disgrace for the Pharma companies? Profitability through Simplicity, October 16, 2019

Health and National Security Issues for the USA and Is The United States of America Prepared

Lack of vaccine and proven treatment for COVID-19 has had the world scrambling to find treatments. Every pharma company is looking for ways to control the disease. Hydroxychloroquine and other drugs have been suggested and used. They might work on individuals but its efficacy is anecdotal. US had difficulty in acquiring sufficient dosages from overseas. FDA had to let that company it had banned to export to US ship to US. US and Indian governments at its highest levels had get involved. This brings up a point of discussion of having capabilities to acquire or produce critical drugs. There is no financial interest with any entity.

Answer to this question for the developed countries is flat NO. 

Most of the generic drugs which are better than 80% of the total US prescription market are imported from China and India ⁽¹⁾. If the drugs stop coming from these countries, US will have no capability to serve its populations pharma needs ⁽²⁾. 

I am sure US legislators are cognizant of these facts and considering alternate options. Ultimate remedy has to bring pharma manufacturing home. However, there are three bottlenecks. They are:

1. US FDA
2. Pharma lobbies
3. Pharmacy Benefit Managers (PBM)

There is no point in discussing what these have done as everyone is aware of there doings. They can implement plans to remedy the situation and bring pharma manufacturing home. 

Pharma and PBM lobbies have to be contained. In addition US FDA has to fix its broken ANDA approval system and create an environment and incentive to bring manufacturing home. Some of these plans are laid out in eth linked blogs. 

1.     What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days? http://bit.ly/31ALUcu

2.     Impact of Regulations, Manufacturing and Pharmaceutical Supply Chain (PBMs) on Drug Shortages and Affordability Part 2 https://bit.ly/2TYQeOQ

3.     Drug Shortages, Quality and Prices: Who is Responsible? http://bit.ly/2oVgmAD

4.     ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability http://bit.ly/34RYypH  

5.     Strategies to Increase Generic Drug Competition and Bring Manufacturing to The United States of America http://bit.ly/3d0gjaO

6.     How Would US FDA Behave/React if They Were on the Receiving End? https://bit.ly/3bwGiVW

7.     Long Term Drug Quality Supplies for US, FDA and A New Reality https://bit.ly/3aKaxZw

Above are ideas that can be used to fine-tuned to create and implement viable plans.  

Girish Malhotra, PE

EPCOT International

1. https://www.statista.com/statistics/205042/proportion-of-brand-to-generic-prescriptions-dispensed/ Accessed May 8, 2020
2. Gibson, Rosemary, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, https://www.uscc.gov/sites/default/files/RosemaryGibsonTestimonyUSCCJuly152019.pdf, accessed May 8, 2020