All opinions are my own.

Monday, September 26, 2022

Innovation in Pharmaceuticals Manufacturing Technologies, Distribution & Regulations: Are they Easy or a Challenge?

Innovation is a natural phenomenon and has resulted in continued lifestyle enhancements ever since humans arrived on Earth. There are too many examples to cite. Progress has been fast. If we just look around many things we touch or use 24/7 did not exist in their current form or not did not exist at all 50+ years ago or shorter time frame. 


Process of continuous improvement in the technologies and products we use and consume seems to be a natural phenomenon. They have facilitated our life style, extended our life span, enhanced taste of foods we eat or drink and even the way we travel. There is no denying that human creativity, imagination and curiosity has resulted in betterment of everything we do. We have to recognize that all the improvements and innovations happen to simplify lifestyle, methods and extend life. They are result of competitive situations. One-upmanship is the name of the game. There is no financial relationship with any organization.  


In pharmaceuticals, for the betterment of life, progress has been made and it excelled through “development and discovery of new drugs”. However there are areas on the pharmaceutical landscape that have been mostly untouched or mildly touched by the human creativity, imagination and knowledge. They are manufacturing technologies (active pharmaceutical ingredients and their formulations), their distribution [Pharmacy Benefit Managers (PBMs)] and regulations [Food and Drug Administration (FDA)]. Except for the development of new treatments for the ailments, their respective roles have not kept pace with time. Many would disagree but there has been very little or no innovation in the areas discussed. Each has to change to improve drug affordability, availability and eliminate shortages. This is explained later. 


Following is a brief history of pharmaceuticals. 


About 80+ years ago there were limited number of chemically synthesized drugs used. It is well known and acknowledged that pharma dosages are a mixture of disease curing active pharmaceutical ingredients (API), fine/specialty chemicals (small molecule) (1), that were blended with inert excipients at doctor’s office and dispensed in single dose paper wraps, sugar coated small balls or dozed as suspension in bottles. Mortar and pestle were used. With time the number of drugs used increased and practice of formulating at doctor’s office was replaced by premanufactured drugs: tablets and capsules (2).


Chemists realized that the synthesis method of API were/are no different from the methods that are used to synthesize dyes and colors, the prevailing chemicals of the era (2). This led to continued use of the existing equipment and methods (Fig. 1) that are used to produce fine/specialty chemicals, colorants and dyes etc. 

Fig. 1: Fitting square plug in a round hole (3)


Unit processes (4) and unit operations (5) used for the production of the desired products have not changed. There are improvements in equipment performance but in general the methods of execution of chemistries has not changed much (2)


Simply reactants are added in round bottom or similar flasks and reacted to produce intermediates that are further reacted with other chemicals to produce the desired product. It is separated, purified to its specifications and finally mixed with inert excipients and tableted to produce the desired dose. Laboratory practices get commercialized in larger size equipment that gets reused to produce other products. Synthesizers realized that since these active ingredients were for human consumption, the equipment had to be super clean to prevent cross contamination.

With time, treatments for different ailments have been introduced. Once the chemical molecule’s disease curing efficacy is recognized, brand company’s mission is to get the product fastest to the market and sell it at the highest price possible. Commercialization is the goal. Speed leads to minimal or no effort for optimizing the process for yield and environmental conservation. Companies believe that this effort is not necessary as it could further delay time to market. 


Other factors have played part are:


1.     Equipment is available to fit the process in the existing equipment: solvents facilitate. 

2.     Quality can be tested rather than engineered even when the science and engineering exist. 

3.     All related costs are passed on to the patients. 

4.     Assured profits. 

Each of the above has played its part in pharmaceuticals. Degree of their influence for the brand and the generic products are different. With profits assured especially when the products extend life, manufacturing technology innovation and environment conservation have very little or no value. Most pharma companies have shrugged away from creating simpler or/and use better manufacturing processes and technology innovations for process simplification and environmental conservation even when the engineering and science knowledge has existed and used in fine/specialty chemicals, the older cousin of pharmaceuticals. Pharma manufacturing has escaped technology innovation. Many would disagree but it is well known fact (6).  


Pharmaceuticals compared to fine/specialty chemical have a very high environmental impact. This is obvious from its high overall emissions per kilo of products (6) and is a result of fitting processes in existing un-optimized equipment (Fig. 1). This is also very obvious from every patent filed and granted patent.


Once the product becomes generic, brand companies have no interest in that product as its manufacturing is taken over by the generics. Occasionally brand companies will put effort in improving API (active pharmaceutical ingredient) manufacturing process but since they do not produce the API, rationality of such an exercise is not understood (7, 8, 9). Such efforts seem to be more of a show and tell rather than a genuine environmental conservation effort.  


Generic drug companies vie to be the first for FDA drug approval on expiring and/or invalidated patents. Since they have time, they do make some effort to improve brand’s manufacturing processes. However, they still come short of manufacturing technology innovation. This is due to their business model and product volume per site (2). They do their best they can but still they do not put much effort in environmental conservation as the product is generally manufactured by many and every value of economies of scale is lost (2).


Thus, based on speed to market and profits, both brand and generic companies do not see any need to optimize their manufacturing processes. Pharma companies being in the “speed mode” do not worry about the environmental impact of their manufacturing processes or the unaffordability or patients going hungry. Brand companies (7, 8, 9) have done process improvement work after the patents have expired and if they patent such improvements, they do not have much value as no one can practice patented technologies. Since the drugs have become generic, due to lack of economies of scale, their work might not have value.   


Since ONE kilogram of API can produce about ONE MILLION tablets of ONE milligram, compared to most specialty chemicals, the total amount of API volume needed is not high. Due to traditions of the past 80+ years of fitting API synthesis in the existing equipment has prevented chemists and chemical engineers involved with their manufacture and formulations not to optimize their processes for yield and environmental conservation. As stated earlier the goal is to commercialize the process/product. 


Patients do not care if the drug manufacturing process is optimized or it pollutes the environment. The only thing they care is that the drug should be available when they need it and should be affordable. Price at times, as stated earlier, are irrelevant even if they have to go hungry (10). The only thing the patient care is “would they get well and fast?”. 

Pharmaceutical industry is in continuous “product innovation” mode as it is inventing new disease cures and delivery methods. However, if they want to leave a legacy of significantly lowering their environmental impac and making their products available to larger population, they have to innovate their processes and manufacturing practices (11)


PBMs and FDA may not realize it but they have significant influence on manufacturing technology innovation, drug pricing, shortages and affordability. They will also have to innovate. Each has shied away as they are comfortable with their current business practices, models as they are unchallenged. PBMs due to their political influence and stranglehold of product distribution, insurance etc. and FDA due to them being a government regulatory body has no accountability. 


For every organization there are two ways to innovate.


1.     Nondestructive Creation 

2.     Creative Destruction


Pharmaceuticals do not want any disruption of their current practices. Fitting the processes has become the most followed pathway for the products that are produced through chemical reactions. However, if they want to significantly lower their environmental impact they have to innovate their manufacturing technologies for APIs and formulations. It needs a paradigm shift and that comes from  capitalizing on their physical properties and a re-look at how the process equipment can be used alternatively. 


Nondestructive creation is the simplest and the least disruptive way to innovate manufacturing technologies. It relies on collaborative creativity of the village (2) and is the most economic and expedient way to innovate. Chemical structures and their properties in their natural state do not change. Their physical and chemical properties are unique (12).Their mutual interaction e.g. solubilities, density and their differences, azeotropic behavior, melting and boiling points etc. exclusively or in combination which I call their social and chemical behavior “sociochemicology” (13, 14, 15) can be exploited to simplify most of the chemical synthesis processes. 


Chemists and chemical engineers are taught physical properties (12) but are not taught how to capitalize on them. These have to be thought through and their inclusion imagined at the start of chemical process development. If applied, they can simplify processes and significantly reduce the solvent use from the onset. This comes from hands on experience. By capitalizing of these, much of the equipment used in pilot plants can be reconfigured and used for commercial production as the yearly volumes of most of the APIs are not very high. All these are reviewed and illustrated in “Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation” (2).


In addition to capitalizing on physical properties and how the chemicals are introduced and removed from the reaction mass can also simplify manufacturing processes. These methods are and have been used in fine/specialty chemicals, the older cousin of API. Some of the methods and examples are shared (2). Chemicals, point of addition and method of removal along with physical properties are assist process simplification.


If the suggested methods are practiced many of the products could be produced continuously (“yes” continuous manufacturing is possible for certain APIs) further reduce environmental emissions and improve profits. It is very likely that manufacturing consolidation may happen and could be resisted by many API companies and formulators. Consolidation could change the supply chain landscape if the producers , as discussed later, could sell directly to the patients (16). Drug producers (API and their formulators) will significantly improve their profits from the current levels. PBMs will make sure this does not happen as they do not want to lose their cash cows.


There are other influencers in pharma manufacturing technology. In my perspective are road blockers. 


1.     Pharmacy Benefit Managers (PBMs) and their partners

2.     Food and Drug Administration (FDA)


One would expect every organization, profit making or government, to stay with times and thus are always in organizational improvement mode. Organizational innovation is not part of this discussion. 


Pharmaceutical drug distribution model and Regulations:

Combination of Hatch-Waxman Act (17) and Environmental Protection Act (18) drove generic drug manufacturing out of USA (19). These along with mutually subsidized healthcare system set the stage for the current drug distribution system. Ease of drug distribution created the current PBMs with its current profitability. Any disturbance will be scorned and will be a tough nut to revamp. FDA being a regulatory body set its own systems for drug approval and safety and along with pharma’s manufacturing practices has stifled innovation. 


PBMs and FDA need to innovate to facilitate drug availability, eliminate and/or reduce shortages. Instead of using “nondestructive creation” effort for their improvement, their landscape needs creative destructionists (20, 21). This is based on the principle that old assumptions/methods need to be broken so that new innovations can benefit from existing resources and energy. PBMs and FDA have grown and become more complex and have not reduced drug shortages and availability. Businesses that can change the current pharma distribution landscape are needed. Regulations will need US Congress assistance to improve the current practices. 


In USA limited number of PBMs (22) through their subsidiaries control the drug acquisition and distribution. When it comes to supply of formulated generic drugs they have relied on divide and conquer strategy for their benefit. PBM’s profits rather than patient wellness is the driver and results in shortages and high prices. Price differentials between US vs. other countries are astronomical (23). Attempts to break the current model have been made but have failed (24). These attempts were ill-conceived and ill-planned. This cycle has to be changed by the manufacturers selling directly to patients (16). US Congress will have to intervene. However, political influence could interfere. PBMs will fight every alternate attempt. Based on human creativity, ingenuity and imagination alternate and resilient business have to change the landscape. 


It may not be accepted and acknowledged but in the name of safety, drug distribution in USA has stifled innovation. Regulators at companies, this may not be acknowledged, and FDA have to re-invent themselves to facilitate drug approval times and manufacturing innovation. Approval of New Drug Application (NDA) and Abbreviated New Drug Application (ANDA) approval methods need significant change (25, 26). If implemented, they will bring innovation of API manufacturing and their formulations. Reduced regulatory approval time and direct selling to patients will change the landscape. 


There are tremendous opportunities to lower drug prices, minimize environmental impact through business model and manufacturing technology innovation. API manufacturers and formulators irrespective of what distributors and regulators do should embark on the process of profitability improvement through manufacturing technology innovation. It will be a great win. As suggested earlier with political influence and government interference, one should not expect any/much change in the drug distribution and regulatory approval landscape. Only mavericks can change that landscape once they see the benefit of innovation in drug manufacturing (2,27)


Girish Malhotra, PE


EPCOT International 


1.     Small Molecule https://en.wikipedia.org/wiki/Small_molecule  Accessed August 10, 2022

2.     Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation, https://www.degruyter.com/document/doi/10.1515/9783110702842/html Accessed June 120, 2022

3.     Square Plug in a Round hole https://www.codewrecks.com/post/old/2011/10/square-peg-in-a-round-hole/ Accessed November 27, 2011

4.     Shreve, R. Norris: Unit Process In Chemical Processing, Ind. Eng. Chem.195446 (4), pp. 672–672)

5.     Unit Operation, https://en.wikipedia.org/wiki/Unit_operation, Accessed July 11, 2017

6.     Sheldon R.A. The E factor 25 years on: the rise of green chemistry and sustainability, Journal of Green Chemistry https://pubs.rsc.org/en/content/articlelanding/2017/gc/c6gc02157c/unauth#!divAbstract  , 2017, 19, 18-43 Accessed February 17, 2021

7.     Sitagliptin https://www.fiercepharma.com/pharma/merck-and-codexis-honored-presidential-green-chemistry-challenge-award-for-novel-process-for  June 21 2010 Accessed April 10, 2022

8.     Fier P. S. et al: Development of a Robust Manufacturing Route for Molnupiravir, an

Antiviral for the Treatment of COVID-19 Org. Process Res. Dev. 2021, 25, 2806−2815 Accessed August 24, 2022

9.     Atorvastatin https://www.epa.gov/greenchemistry/presidential-green-chemistry-challenge-2006-greener-reaction-conditions-award Accessed August 24, 2022

10.  Malhotra, Girish: Drug Prices: Food vs. Medicine - A Difficult Choice for Some June 16, 2011Accessed August 22, 2022

11.  Malhotra, Girish: An Alternate Look at the Pharmaceutical World Revenues and Drug Affordability Manufacturing Chemist October 23, 2017 Accessed September 18, 2018

12.  Difference Between Intensive and Extensive properties of Matter, https://sciencenotes.org/intensive-extensive-properties/March 18, 2020 Accessed December 20, 2021 

13.  Malhotra, Girish: Process Simplification and The Art of Exploiting Physical Properties, Profitability through Simplicity , March 10, 2017 Accessed April 30, 2022

14.  Malhotra, Girish: Focus on Physical Properties To Improve Processes: Chemical Engineering, Vol. 119 No. 4 April 2012, pgs. 63-66 Accessed May 10, 2022

15.  Malhotra, Girish: Process Simplification and The Art of Exploiting Physical Properties Profitability through Simplicity, March 10, 2017 Accessed April 30, 2022

16.  Malhotra, Girish: Improving Drug Affordability for the United States Populous through Alternate Business Models Profitability through Simplicity, May 4, 2018 Accessed September 10, 2022 

17.  The Hatch-Waxman Act: A Primer https://www.everycrsreport.com/reports/R44643.html September 28, 2016 Accessed September 10, 2022 

18.  Evolution of the Clean Air  https://www.epa.gov/clean-air-act-overview/evolution-clean-air-act  Accessed September 10, 2022

19.  Malhotra, Girish: Why Have the Fine and Specialty Chemical Sectors Been Moving from the Developed Countries? Profitability through Simplicity February 9, 2009 Accessed September 12, 2022

20.  Creative Destruction Schumpeter: Definition https://youmatter.world/en/definition/creative-destruction-schumpeter-definition/April 20, 2020 Accessed August 15, 2022

21.  Adler, David: Schumpeter’s Theory of Creative Destruction https://www.cmu.edu/epp/irle/irle-blog-pages/schumpeters-theory-of-creative-destruction.html September 20, 2019 Accessed August 15, 2022

22.  FTC launches investigation into PBMs; CVS, UnitedHealth, Cigna and more hit with requests for data https://www.healthcaredive.com/news/ftc-launches-investigation-into-pbms-cvs-unitedhealth-cigna-and-more-hit/625058/June 7, 2022 Accessed August 30, 2022

23.  Malhotra, Girish: Systematic Demystification of Drug Price Mystique and the Needed Creative Destruction, Profitability through Simplicity October 2, 2019 accessed March 8, 2022

24.  Malhotra, Girish: Could Amazon (A), Berkshire Hathaway (B) and J.P. Morgan Chase (M) be the Antiballistic Missile (ABM) needed to Control/Curb Rising Healthcare Costs? Profitability through Simplicity, February 8, 2018 Accessed August 29, 2022

25.  Malhotra, Girish: What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days? Profitability through Simplicity, October 24, 2018 Accessed August 29, 2022

26.  Malhotra, Girish: Simplified Roadmap for ANDA/NDA Submission and Approval will change Pharma Landscape, Profitability through Simplicity, November 25, 2018 Accessed August 29, 2022

27. Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011 Accessed September 19, 2022