Climate Change and Greening of Pharmaceutical Manufacturing

My last blog post “Active Pharmaceutical Ingredient Manufacturing (API) and Formulation Drive to NET ZERO (Carbon Neutral)?^“ (1) ends with the following statements. “Minimizing/reducing the “E-Factor” (environmental factor) ⁽²⁾ is a multiple win. It will lower manufacturing costs, protect public health and the environment and also lower the drug costs to the public. We need to ask ourselves “What would be our legacy for the generations to come?” Let us write it.”

This blog is not a criticism of the current landscape but a reality check of pathways for the Pharma industry, the largest emitter per kilo ⁽²⁾, has to take to minimize or eliminate and achieve Net-Zero ⁽¹⁾ emissions. It is not going to be easy due to internal and external challenges. 

Climate Change/Global Warming:

Over the years scientists, engineers and business professionals have made significant discoveries to advance the world to where we are today. Our lives have been facilitated by most of the discoveries and innovations. We are grateful to all who have made this possible. It is time that we do something for the generations to come especially when it comes to global warming ⁽³⁾. Our deeds will be our legacy. Perspectives shared are my own and are not influenced financially or otherwise by any governmental or non-governmental or regulatory body. 

With global warming ⁽³⁾ and the general thrust on ESG (environmental, social and governance) ⁽⁴⁾ and social media bruhaha, conservation ⁽⁵⁾ have suddenly become an important buzzwords in most conversations and a cause of concern. Till recently what was or has been considered “par for the course” ⁽⁶⁾ in pharma’s vocabulary has come to the forefront of conversations.  

Incorporation of elements of Climate change conference in Glasgow ⁽⁷⁾ has recently appeared on Pharma’s goals. In furtherance to my earlier perspective ⁽¹⁾, pharma will have to be proactive and do what is necessary if it wants to preserve our environment and address issues related to global warming ⁽³⁾. Pharmaceutical industry like others has its “once in life time opportunity” to significantly lower its emissions. Effort would be needed.  

Recently few brand drug pharmaceutical companies have put forth their plans ^{(8, 9)}. A review of the proposed plans indicate that emphasis of majority of the companies is on energy conservation. My conjecture is that these programs to achieve “Net Zero” have not even touched the tip of the iceberg. 

It is noteworthy that there except for Amgen ⁽⁸⁾ others have not mentioned anything about their API manufacturing and formulation practices. Pharma is the biggest contributor to the emission factor ⁽²⁾. Generics have not publicly presented any plans for reduction of “global warming ⁽³⁾”. Most emissions come from solvent use even when they are recycled and reused. 

The following triumvirate has to act in unison if anything meaningful has to happen in pharma’s effort for reduction of global warming ⁽³⁾. Each will face challenges if anything meaningful has to happen. Question is how they will cooperate to reduce global warming ⁽³⁾. 

Current Business Model and Manufacturing technologies:

• Current business model
• Manufacturing technologies 
• US Food and Drug Administration and other regulators

Before we review the pathways to minimize/reduce pharma’s E-Factor, we need to review how did we get to this stage. Discussion is applicable to brand and generic drugs. Biotech drugs are new to the landscape but their process manufacturing execution is similar to the methods of small molecules. Some may disagree but the same engineering principles apply to their manufacture also.  

About one hundred years ago the fine and specialty companies of the era started with producing dyes. These companies saw a much higher value in drugs and opted to become pharmaceutical companies ⁽¹⁰⁾. Chemistries and manufacturing methods for the active pharmaceutical ingredients (API) are same or similar to what were/are used for dyes, additives for the plastic, food, oil, paint and flavors and fragrances. Same or similar chemistries, unit processes ⁽¹¹⁾ and unit operations ⁽¹¹⁾ are used for manufacturing of most of these products. With these similarities and the equipment being available, it was and has been easy to use the existing equipment ^(12,13) to produce APIs and formulate them to a dose form. 

The only difference between drug molecules and other fine/specialty chemicals is that the drugs have to meet and comply with different and stricter regulations ⁽¹⁴⁾. Even with similar/same chemistry and manufacturing lineage many in the pharmaceutical industry treat drug molecules “cut-above” ⁽¹⁵⁾ the fine chemical industry products even when It has continued to use its manufacturing practices/methods and equipment inefficiently ⁽¹⁶⁾ and still looks down on it with disdain, which is ironic. 

Since seventies environmental issues have increasingly cropped up. Their recognition led to the adoption of environmental control regulations. As a result some in the chemical and pharma industries took necessary steps to minimize effluent or emissions using the technologies that were/are available. 

With the introduction of Hatch-Waxman Act ⁽¹⁷⁾ generic drug use expanded in the developed countries. Many companies entered/moved the pharma business to the developing countries where the labor costs are significantly lower and the environmental laws were/are lenient compared to the developed countries ⁽¹⁸⁾.      

Pharma manufacturing, brand and generic drugs have followed their own business and manufacturing technology model. Due to profitability, as reviewed later, It did not need to innovate and it has resulted in high emissions ⁽²⁾. Even after this recognition, it still lags innovation and the has had minimal concern for the global warming ⁽³⁾. 

Small quantity of active molecule serves the needs of many patients [one kilo of active ingredient can produce ONE million doses of one milligram each]. Thus large quantities of API were/are not needed to serve large population base. Table 1 ⁽¹⁹⁾ is an illustration of API needed per year, finished dose formulations dose (FDF) and population they can serve. 

Patients	Milligrams	# of Tablets/ person/yr.	API, Kilograms/year	Tablets/yr.
50,000,000	1	365	18,250	18,250,000,000
50,000,000	50	365	912,500	18,250,000,000

Table 1: API and Tablets per year Relationship ⁽¹⁹⁾

Theoretically both APIs in Table 1 can be produced at a single plant but is not the case as explained later. Due to the production volume, multiple plants would be needed for formulation of the APIs inTable 1. Many can be continuous but due to traditions and regulatory encumbrances, they are batch operations.

Since the drugs are generally sold at the highest price patients can afford, they lead to high profits as illustrated in Table 2 ⁽²⁰⁾. Table 3 ⁽²⁰⁾ illustrates price mark up by well-known pharmacies.  If formulators increased their margins multifold, Table 2 ⁽²⁰⁾, they will have minimal impact on the selling price of the tablet to the patient.  

Drug	Metformin HCl	Ciprofloxacin	Levothyroxine	Atorvastatin
API cost $/kg	4.00	25.00	4400.00	310.00
Inert excipients $/kg (@40%API cost)	1.60	10.00	1760.00	124.00
Conversion cost, $/kg(@40%API cost)	1.60	10.00	1760.00	124.00
Profit (@ 40% above)	2.88	18.00	3168.00	223.20
Total. $/kg	10.08	63.00	11088.00	781.20
Average Dose	500 mg	500 mg	0.112 microgram	20 mg
Formulator Sale price per tablet, $	0.005	0.032	0.001	0.008
Patient purchase price, $/tablet
Walmart	0.07	1.04	0.11	0.30
Rite-Aid With insurance	0.07	0.2	0.17	0.31
Rite-Aid Without insurance	0.7	4.77	0.82	3.97

Table 2: Formulator Drug Selling Price $/kg and Patient Purchase Price ⁽²⁰⁾
 

% Mark-up from Formulator Selling Price
Walmart %	1322.75	3314.29	8947.18	1920.12
Rite-Aid % With insurance	1322.75	634.92	13411.83	1969.90
Rite-Aid % Without insurance	13888.89	15130.16	66200.20	25387.58

Table 3: Percent Price Differential between Formulator and Patient ⁽²⁰⁾

With the profitability illustrated in Tables 2 & 3 many enter the pharma API and formulation business. Table 4 and Table 5 illustrate number of plants that produce API and finished drug formulations (FDF) for three specific drugs. Their average yearly volumes are based on certain assumptions. With number of plants producing the API and formulating them, every chemical engineer can expect that due to simplicity of chemistries they are being produced in equipment ^(12,13) that is available in most plants.  

	Omeprazole	Metoprolol	Modafinil
Population	7,800,000,000	7,800,000,000	7,800,000,000
Global need, %	14	1	0.06
# people	1,092,000,000	78,000,000	4,680,000
mg needed/day	40	50	200
Tablets used # days/yr.	50	365	365
Total mg needed/day	43,680,000,000	3,900,000,000	936,000,000
API need Kg/Yr.	2,184,000	1,423,500	341,640
Current Number of API Sites	94	29	51
Current Number of FDF Sites	768	70	338

Table 4: Annual API Need for the illustrated drugs ⁽¹⁾   

Any good chemist or a chemical engineer can modify the process chemistry of these or any other APIs to fit them in the existing equipment ^(12,13). Same can happen for FDFs facilities also. They will have to follow cGMP ⁽¹⁴⁾practices. This means the equipment would have to be cleaned to meet the established criterion so that the upcoming products do not get contaminated. 

Number of plants producing the same APIs and formulating them in the existing equipment ^(12,13) generally negate any value of economies of scale ⁽²¹⁾.  

	Omeprazole	Metoprolol	Modafinil
Current Number of API Sites	94	29	51
Current Number of FDF Sites	768	70	338
API Production, Kg./yr./plant	23,234	49,086	6,699
Hrs. for 100,000 Tablets/hour/plant/yr.	711	4,067	51

Table 5: Yearly production and hours needed for formulation 

With the number of plants producing the above three products each will be a batch process. This suggests that each plant producing these products will not be using their equipment efficiently and even might have less than optimum yield. Asset utilization would follow the norms of pharma industry which are less than 50% ⁽¹⁶⁾. In addition, as stated earlier processing equipment would require cleaning between batches to meet cGMP ⁽¹⁴⁾ requirements. Excessive use of solvents and reuse adds to “global warming” ⁽³⁾ or “climate change” ⁽⁵⁾. With the profitability assured, existing operations have not had any need to worry about their impact on “global warming” ⁽³⁾. 

In order to make any dent on emission factors, pharmaceutical manufacturing will have an arduous task as it will have to tackle its current business model, manufacturing methods, the regulatory bodies and Pharmacy Benefit Managers (PBMs) and rest of the supply chain.

Pharmaceutical Manufacturing and Regulations:

Pharmaceutical manufacturing has two components. API manufacturing and their formulations. Of the two API manufacturing is easier to simplify as most synthesis are conducted in solvents. Their flow and stoichiometry can be very well controlled and managed ⁽¹⁰⁾. Majority of the formulations are combination of solid and liquid blending to produce a consistent and uniform quality product that can be converted to a dose. Current short run batch processes would have to be converted to continuous blending and tableting processes. Such processes will have to be developed. It is best that they be done at the formulating company and not at equipment vendors. Any blending developed in the lab or the pilot plant would require commercial scaleup. This could be a challenge and would require time to perfect each process. If the short runs are not converted to continuous runs, solvent cleaning would be required between product switches. This would be the same practice as now and might not result in much or any solvent reduction, a cause of global warming.

If we hypothetically assume that pharma companies can deal with manufacturing technologies they will have to address their business model and comply with regulations. Each presents difficult challenges. For the business model to change it would mean reduce number of emission sites and manufacture products differently ⁽¹⁰⁾. This will not sit well with many companies as some will have to go out of business if they cannot reduce their emissions. Shutdowns could result in temporary drug shortages. 

Current manufacturing practices will have to be changed and this could take time. All of the necessary manufacturing equipment and tools are available and commercially used. Their use will have to configured and practiced differently to assure there are no shortages. A re-learning would be necessary ^{(10, 22, 23)}. Another question and it could be a critical question could be “do we have enough trained chemical engineers who could take on the task and meet the posed challenge?” 

If companies do adapt different business model and manufacturing methods to meet the environmental challenge, the biggest hurdle would be the regulatory bodies who will demand that every new manufacturing process/method be approved/re-approved before it can be commercialized ⁽²⁴⁾. Since drugs are used for human consumption, this request in not unruly. Regulations will also have to be changed. This in itself could take long time as the regulators do not exactly know what all is needed.  

It is ironic and totally arcane that USFDA [US Food and Drug Administration] ⁽²⁵⁾ and ICH [The International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use] ⁽²⁶⁾ have been through every mean possible, funding of institutions ^{(24, 27)} (tax payers money), too many to cite, have been pushing the pharmaceutical industry to change their manufacturing technologies/methods when most of the participants from these institutions have none or minimal experience in developing processes and commercializing them. It is ironic that none of these address “global warming” ⁽³⁾. In addition, it is most likely they also might not have complete understanding of the Pharma’s business strategies and models. It is well known fact that companies innovate and commercialize innovations and regulators just regulate.   

In addition, most regulators do not have enough hands on experienced staff who are familiar with chemistries and manufacturing practices or the business models and impact of regulations on businesses. Regulators will have to rely on the information provided by the filing companies. Their acceptance by the regulators could difficult. If efficacy of every manufacturing change has to be demonstrated and approved, it would take long time for pharma to reduce their “E-Factor” ⁽²⁾ emissions. Recently Department of Health and Human Services (HHS) launched an office to treat climate change as a public health issue ⁽²⁸⁾. Basically, it is manifestation of FDA/HHS’s ⁽²⁵⁾ and ICH’s ⁽²⁶⁾ lack understanding of pharma’s manufacturing processes, emissions ⁽¹⁾ and their impact on global warming ⁽³⁾. 

Current approval time delays will have to be changed. In addition, the regulatory bodies considering their current modus operandi do not have the staff that can react and rationalize manufacturing and approval practices. Producing companies will have to take the responsibility of making sure that the produced products meet the established drug performance and quality. If the current practices are not simplified, the approval processes will be extremely disruptive to the drug supply chain and shortages could result. 

If pharmaceutical manufacturing which included active pharmaceutical ingredient, biotech drug manufacturing and their formulations want to participate in reduction of global warming, every involved organization will have to participate. Regulations and patent laws might have to changed. Pharmacy Benefit Managers (PBMs) and every intermediary will have to reconfigure their business practices. Many would raise the drug prices to the patients. Alternate distribution of drugs through direct marketing to patients might have to be rejuvenated. Political and economic resistance would be there. 

For pharma producers to achieve their established Net-Zero goals API, biotech manufacturing and their formulation technologies will require re-engineering and alternate application of chemistry and chemical engineering principles. In addition, regulatory conformance and methods would also require re-engineering and re-look. Each task is not going to be easy. 

Net-Zero/Greening or addressing Global Warming in Pharmaceutical will have political and social interference making the task difficult. We need to overcome that so that our future generations will be proud of what we accomplish.  

Girish Malhotra, PE

EPCOT International 

 

1.  Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing (API) and Formulation Drive to NET ZERO (Carbon Neutral) https://pharmachemicalscoatings.blogspot.com/2021/04/active-pharmaceutical-ingredient.html  April 29, 2021 Accessed January 10, 2022
2. 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
3. Overview: Weather, Global Warming and Climate Change https://climate.nasa.gov/resources/global-warming-vs-climate-change/ Accessed January 10, 2022 
4. Environmental, Social, and Governance (ESG) Criteria https://www.investopedia.com/terms/e/environmental-social-and-governance-esg-criteria.asp  March 5, 2021 Accessed January 7, 2022
5. A pivotal moment in the fight against climate change. https://ukcop26.org/uk-presidency/what-is-a-cop/Accessed January 16, 2022 
6. Par for the Course https://www.collinsdictionary.com/us/dictionary/english/par-for-the-course Accessed January 10, 2022
7. COP Goals https://ukcop26.org/cop26-goals/ Accessed January 20, 2022
8. US pharma giants combat emissions crisis with long-term net-zero pledges https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-pharma-giants-combat-emissions-crisis-with-long-term-net-zero-pledges-66729132 Accessed January 7, 2022
9. Van Arnum, Patricia: Big Pharma and Sustainability: Tracking Companies’ Goals https://www.dcatvci.org/features/big-pharma-and-sustainability-tracking-companies-goals/ January 20, 2022 Accessed January 21. 2020
10. Malhotra, Girish K. Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation, De Gruyterhttps://www.degruyter.com/document/isbn/9783110702842/html
11. Unit Processes and Unit Operations https://chemicalengineeringworld.com/unit-operation-and-unit-process/Accessed January 15, 2022
12. Malhotra, Girish: Square Plug In A Round Hole: Does This Scenario Exist in Pharmaceuticals? Profitability through Simplicity https://pharmachemicalscoatings.blogspot.com/2010/08/square-peg-in-round-hole-does-this.html  August 17, 2010 Accessed January 19, 2022 
13. Malhotra, Girish: Why Fitting a Square Plug in a Round hole is Profitable for Pharma and Most Likely Will Stay? Profitability through Simplicity https://pharmachemicalscoatings.blogspot.com/2014/08/why-fitting-square-plug-in-round-hole.html  August 1, 2014 Accessed January 20, 2022
14. cGMP (https://www.fda.gov/drugs/pharmaceutical-quality-resources/current-good-manufacturing-practice-cgmp-regulations  September 21, 2020 Accessed December 20, 2021
15. Cut above https://www.collinsdictionary.com/us/dictionary/english/a-cut-above Accessed January 17, 2022 
16. Benchmarking Shows Need to Improve Uptime, Capacity Utilization, Pharma Manufacturing, https://www.pharmamanufacturing.com/articles/2007/144/ Sep 20, 2007 Accessed January 18, 2022
17. Hatch-Waxman Act https://en.wikipedia.org/wiki/Drug_Price_Competition_and_Patent_Term_Restoration_Act  Accessed January 17, 2022
18. Malhotra, Girish: Why Have the Fine and Specialty Chemical Sectors Been Moving from the Developed Countries? Profitability through Simplicity https://pharmachemicalscoatings.blogspot.com/2009/02/why-are-fine-and-specialty-chemical.html  February 9, 2009 Accessed January 15, 2022
19. Malhotra, Girish: Pharmaceutical Quality: Concepts, Misconceptions, Realities and Remedies Profitability through Simplicity https://pharmachemicalscoatings.blogspot.com/2019/11/pharmaceutical-quality-concepts.html    November 9, 2019 Accessed January 7, 2022
20. Malhotra, Girish: Systematic Demystification of Drug Price Mystique and the Needed Creative Destruction, Profitability through Simplicity,  https://pharmachemicalscoatings.blogspot.com/2019/10/systematic-demystification-of-drug.html October 2, 2019 Accessed January 17, 2022 
21. Kenton, W: Economies of Scale, https://www.investopedia.com/terms/e/economiesofscale.asp  March 28, 2021 Accessed January 17, 2022
22. Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability, http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470487542.html John Wiley & Sons, February 2011
23. Malhotra, Girish: Chapter 4 Simplified Process Development and Commercialization” in “ Quality by Design-Putting Theory into Practice” 
24. https://store.pda.org/TableOfContents/17296_TOC.pdf co-published by Parenteral Drug Association and DHI Publishing© February 2011
25. National Academies of Sciences, Engineering, and Medicine 2021. Innovations in Pharmaceutical Manufacturing on the Horizon: Technical Challenges, Regulatory Issues, and Recommendations. Washington, DC: The National Academies Press. https://doi.org/10.17226/26009 January 26, 2017 Accessed December 13, 2021
26. FDA https://www.fda.gov
27. ICH https://www.ich.org/page/process-harmonisation
28. H.R.4369 - National Centers of Excellence in Advanced and Continuous Pharmaceutical Manufacturing Act of 2021 https://www.congress.gov/bill/117th-congress/house-bill/4369?s=1&r=5 Passed House October 19, 2021
29. Climate Change to Be Treated as Public-Health Issue https://www.wsj.com/articles/climate-change-to-be-treated-as-public-health-issue-11630315800 The Wall Street Journal August 30, 2021 Accessed August 31, 2021