Health/wellness of every manufacturing business is measured by its profitability with time. Laws of economics apply to product development, equipment investment, manufacturing processes and its business practices. Most discussed here is well known and understood but a repeat discussion is necessary to reinforce the fundamentals and capitalize on “collective creativity” of the village (1, 2).
Discussion here is applicable to Fine/Specialty Chemicals and Active Pharmaceutical Ingredient (API) manufacturing. However, emphasis is on the pharmaceutical industry. Discussion is not influenced by any for profit, non-profit or regulatory body.
Pharma’s Manufacturing Landscape:
Pharmaceutical industry is well known for creating new drugs. Due to the delays in the approval process, brand new drugs have a limited patent life. Brand company mission has been to offer drugs for sale as soon as they approved by the regulators. Since the pressure to monetize in the largest market (US) is paramount, companies have not considered the need to optimize their manufacturing processes. There has been no need as the process inefficiency costs are absorbed in the selling price and passed on to the patients. Manufacturing inefficiencies have environmental side effects thus a serious remedial review is necessary (1, 2, 3, 4, 5) and corrective means have to be applied from the inset of product/process development.
Pharma’s Manufacturing Evolution:
About eighty years ago the fine/specialty chemical companies of the era discovered the disease curing value of certain products. They realized that their existing equipment could be easily used to manufacture many of these chemicals. Reason for this practice has been that the chemistries practiced to synthesize these fine/specialty additives, dyes and other chemicals were/are very similar to the chemistries used for the manufacture of API. This tradition has continued as it avoids new capital investment for each new product (1, 2, 3, 4, 5). There is environmental impact of the current practices. Even with recovery and reuse of chemicals, their impact to large extent has been ignored (6).
Many factors intervene process design and optimization for each product. One is low overall volume (kilograms) of API needed to cure large population. One kilogram of active ingredient can serve ONE MILLION patients at one milligram dose. Brand companies, while the drug is under patent, due to potential re-approval requirement of the drug do not want to spend time to optimize the process. Many generic companies produce the same API and due to lack of economies of scale do not optimize. Use of the existing equipment limits optimization. There are ways and methods to achieve that (1, 2, 3, 4, 5).
Traditions of batch (7) manufacturing i.e. time dependent processes, have been and are used by brand and generic API producers for the last 70+ years. Companies modify their laboratory chemistry i.e. process to fit in the existing equipment (2)at many plants (8) even if it becomes less than optimum. As a result its emissions “E-Factor” (6) compared to others in chemical industry are highest per kilo product. Value of economies of scale are lost. Since many different products can be produced in the same process equipment, cleanliness of the equipment is critical. Equipment utilization is around 45-55% (9). Added costs due to low asset utilization are passed on to the patient. This scenario also minimizes investment in better technologies.
Another factor that has led to the current state of manufacturing, my conjecture, is the similarity between laboratory and the commercial equipment. Commercial equipment used to produce dyes was and could be readily used to produce disease curing chemicals. This tradition has continued. Prevailing strategy in the chemical industry and that includes API manufacturing and their formulations has been to maximize utilization of the available equipment. Modifying the process to fit in the existing equipment also shortens the commercialization time even if the process is inefficient. Need for alternate process and equipment exploration that could simplify manufacturing and lower environmental impact is not a priority.
Process Development and Scaleup:
Chemical engineers and chemists design process equipment to produce a certain product. Investment in the equipment is amortized over period of time. If the existing equipment cannot be used to produce the desired product, it sits idle till some other product can be fitted in it. Companies do not like idle equipment. Cost of the idle equipment is either absorbed by the company which means lower profits or is passed on to the customer especially in pharmaceuticals where the patients pay the asked price to have the drug to extend life. This is how the economics works.
Earlier in my career I got involved with an organization where we were producing our products and were a contract developer and manufacturer of fine/specialty chemicals that were used in food, drug, cosmetic and additives. With the diversity of products and having fixed equipment it had to be used like the equipment used in most CDMOs (contract development and manufacturing organization). Invest in new equipment was not an option. We developed processes and commercialized them to make sure our processes were profitable to us and economic for the customer.
We accomplished that by having a team that included chemists, chemical engineers who ingeniously developed and commercialized processes, quality control and analytical chemists made sure that we could test and deliver the desired product on time, purchasing to make sure we sourced and were cost effective in every raw material purchase, maintenance to make sure that we could modify and use the existing equipment, manufacturing to make sure that our processes were safe and economic, accounting to cost out the whole process to meet our profit expectations. End result of collegium’s, “village (1), effort was speed, quality and profits for us and our customer.
Collective creativity and imagination of the “village” were at their best. Same caliber of personnel is available today but unless their capabilities are not exploited to the fullest they will not be able to deliver the best. Basic reason is that the companies are profitable even with manufacturing inefficiencies. This is due to patient’s willingness to pay to extend life. “E-Factor (6)” in such cases is high it needs attention.
Manufacturing Technology Innovation:
It is well known across the board in every industry that competition leads to continuous innovation. This is a universal fact and applies to fine/specialty chemical and its subset pharmaceutical API. Many might not agree with putting API with fine/specialty chemical in the same category. Fact is that their chemistry and manufacturing methods are same. One improves life style and the other extends life. They are produced in the same kind of processing equipment. We have to acknowledge and recognize that the chemical engineering and chemistry applied to fine/specialty chemicals and API manufacturing are the same. Only difference is their purity and manufacturing regimen. API manufacturing has escaped competitive regimen since the patients are willing to pay the asked price to extend life.
Fine/specialty chemical industry due to their product volume and competition has innovated. Pharma innovates in discovering new disease curing molecules and has done an excellent job. Manufacturing technology innovation has been missing in the manufacture of APIs. This is obvious due to lack of any quantifiable processing innovations in API manufacturing for the last 50+ years as can be seen from fitting their processes in the existing equipment available on their sites (10). Another factor is limited product volume needed to serve masses as explained earlier and its ability to generate the desired profits.
Time has come for the API manufacturing to change their internal landscape. It has to come from within the pharma companies. None of us, the outsiders and the regulators, can force innovation. Everything, process and investment, has to be justified. Regulator will have to change their constrained pathways and edicts for the companies to innovate their manufacturing methods. Impact will be significant.
Exploitation of “village” may lead to changing pharma’s business model. Agility of alternate model could alleviate drug shortages. It will be a big universal win. However, due to traditions of pharma, evaluation and consideration of different models could be an obstacle.
Missed Opportunities:
Chemists and chemical engineers are taught the fundamentals of chemicals used (their physical and chemical properties), unit operations and unit processes but are not taught how to exploit their mutual behavior which can be used to create simple and excellent processes (1,3,11). This comes from experience. API manufacturing needs to capitalize on this and our imagination to simplify reaction chemistries and processes.
Chemical engineers need to get involved in process development from the onset of chemistry and process development (1). Companies also have not explored alternate equipment that is commercially available for chemical synthesis. My conjecture is that it is due the speed to the market and not venturing out of the traditional teachings and practices. Low product volume per site also prevents such exploration and adoption. Companies have stuck to traditional methods used in process development and their commercialization practices.
Excellent understanding and creativity is needed to capitalize on physical and chemical properties of the chemicals and their mutual behavior (12). Collective creativity and imagination of the village (1, 3, 4) explained earlier needs to be used. It will not only create excellent processes but will also reduce commercialization time. Benefit would be simpler processes, improved asset utilization, lower manufacturing costs, improved profits and product quality. Pharmaceuticals can make a quantum leap towards lowering its “net zero” (6) emissions.
Innovation Pathway:
Village (1) has to be involved from the onset of the process development. They have to be knowledgeable about the chemistries, physical and chemical properties and their mutual behavior of chemicals used and produced in the process. They also have to be able to imagine and use the process equipment available, even used for other products, for different unit operations. Some of the equipment available offers advantages over currently available equipment (1). All of the information exists and is waiting to be tapped for excellent process design. Product volume will have significant influence. As suggested earlier pharma’s current business model might have to be changed. Each company will have to choose their pathway.
Chemical engineers and chemists who are well versed in process design can visualize and capitalize on sociochemical behavior (12) of chemicals used and produced. They can be creatively used to simplify processing, reduce solvent use, improve yield from the onset. All of this has to be done internally at Fine/specialty and API product development companies (1, 4). Involvement of village (1,4) will lead to a seismic shift especially at pharmaceutical companies and would lead to considerable lowering of pharma’s emissions, increase of profits and reduce drug shortages. Change is not going be overnight and an “nondestructive creationist” (1) from within the company would have to lead the effort.
All of the above needs a review and adoption by individual company. Every investment has to be justified internally by each manufacturing company. Question is “Is the Pharmaceutical Industry able and willing to include manufacturing technology innovation as part of their new drug development and manufacturing?” It is critical that the regulators do not intervene in “self-evaluation” by the companies especially when they do not have much business experience in process development and manufacturing.
To recap manufacturing processes based on suggested methods when commercialized would have significantly lower costs, lower E factor (6), improved asset utilization and should be able to react to shortages. Profits would higher and as said earlier it will be a UNIVERSAL WIN.
Girish Malhotra, PE
EPCOT International
1. Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter April 2022,
2. Malhotra, Girish: API MANUFACTURING AND ENVIRONMENTAL SUSTAINABILITY, TEKNOSCIENZE Vol. 40(5)September/October 2022 Accessed November 10, 2022
3. Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011,
4. Malhotra, Girish: Chapter 4 “Simplified Process Development and Commercialization” in “ Quality by Design-Putting Theory into Practice” co-published by Parenteral Drug Association and DHI Publishing© February 2011,
5. Research Report: Strategies for Improving Batch or Creating Continuous Active Pharmaceutical Ingredient (API) Manufacturing Processes, published February 2011 available free
- 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. Batch Production, Wikipedia http://bit.ly/31dzpo3 Accessed January 10, 2022
8. Malhotra, Girish: Impact of Regulations, Manufacturing and Pharmaceutical Supply Chain (PBMs) on Drug Shortages and Affordability Part 2, Profitability through Simplicity, April 3, 2019 Accessed December 10, 2022
- Benchmarking Shows Need to Improve Uptime, Capacity Utilization, Pharma Manufacturing, Sep 20, 2007 Accessed January 18, 2022
10. Malhotra, Girish: Innovation in Pharmaceuticals Manufacturing Technologies, Distribution & Regulations: Are they Easy or a Challenge? Profitability through Simplicity September 26, 2022 Accessed December 10, 2022
11. Malhotra, Girish: Considerations to Simplify Organic Molecule (API) Manufacturing Processes: My perspective Profitability through Simplicity April 20, 2019 Accessed November 10, 2022
12. Malhotra, Girish: Sociochemicology May 30, 2013 Accessed January 13, 2023
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