All opinions are my own.

Saturday, November 25, 2023

USA’s Annual Ritual of Drug Sourcing/pricing and Shortages

In fourth quarter of every year in USA, there is a euphoria of finding the right prescription drug sourcing (1) plan. With number of players offering their plans one has to be careful to pick the right plan for their needs. It is interesting to note that we are given a filled price for the drug. Generally there is no breakdown of the components that make the payment to be made. 
It is generally accepted that the drugs will be available or shipped from the selected pharmacy and all will be good. It is worth noting that about 90% of the drugs dispensed are generic drugs (1, 2) and sourced through various suppliers under Medicare healthcare plans. According to US Census Bureau about 92.1 % of the US population has healthcare coverage (3). The numbers suggest that majority of the US population has access to generic drugs. However, issues of shortages and unaffordability prevails. Brand drug prices are not part of the discussion. Due to lack of any immediate competition they set their own sale prices. 
Pathway of the generic drug to the patient and pricing needs some explaining. PBMs (pharmacy benefit managers and their partners) purchase the drugs from manufacturers and distribute them. Their mission is maximize profits. 
Prescribers generally do not know the breakdown of the monies they pay i.e. cost of the drug, handling and shipping etc. Patient pays the price their drug provider charges. Table 1 reviews the price breakdown for two drugs. 
One of the age old trading practices is to pressure the manufacturer to lower their selling price. If the manufacturer does not make their desired profit, they will not sell the drug to PBMs and this will result in shortages. Patients will experience these. For PBMs drug becomes an “ITEM” of trade rather than a person’s life depends on it. To them profits are more important than the life of the patient/customer. 
Generally a cost breakdown of any drug is not in public domain. Their discussion is healthy as many ambiguities can be cleared. A cost breakdown and comparison with and without insurance (4) gives us the landscape. CostPlusdrugs.com (5) drug price breakdown is reviewed here. Prices of GoodRx.com (6) can be used for comparison. A review clears any misconception one could have. Perspective here reviews the cost of the generic drugs from the factory floor to the patient. Similar but different scale of numbers apply for the brand drugs. I am not influenced by any for or non-profit entity. Observations presented are my own. 
With such a large population being covered by various healthcare drug programs it is my belief that number of patients going outside their healthcare system to purchase drugs is going to be minimal. For patient going out of the network would be an anomaly. It would be same as an impulse purchase. It is  well known fact that such purchases are high priced (4). Thus listing of “retail prices” on respective sites (5,6) seems more like a scare tactic than a reality as very limited number will purchase drugs at retail prices.  

Lately drug shortages are increasing in the news. Has anyone analyzed why? Most likely no. They have a simple explanation. It is the profit at manufacturer level. Table 1 in the referred post (4) and this post clearly show the drug price component of each drug sell price. 
Even if manufacturing companies make a concerted effort to lower their manufacturing costs by using better processing technologies that can significantly lower their current environmental emission impact and are able to improve profits at their level, landscape will not change much. US will continue to see generic drug shortages (7) as PBMs will continue to pressure manufacturers to lower their selling prices. 
An analysis of adventure by Amazon, Berkshire Hathaway and J.P. Morgan (8) was bound to fail from the onset as they had no comprehensive and rational plan. Out of the box thinking” was needed but not considered (9, 10). Only viable alternate is that drug manufacturers take over the distribution and compete (7). Competition will be lower overall drug prices and will be an overall win for the country. Generally it is.  
Table 1 is a comparison of factory drug prices and what a customer would pay if they bought the drugs from Costplus Drug Company (5)and /or Amazon. Amazon does provide medications at discounted prices but details are not available unless one signs up (11).

It is interesting to note that the drug component even after manufacturer making 200% profit are a small percentage of the drug selling price after including handling and shipping. These charges can be as much as 700+% above the drug manufacturer’s selling price. My conjecture is that such markups apply across the generic drug sale landscape. Better API and formulation manufacturing technologies (12) and shipping and handling technology combination present an opportunity to improve profits and lower prices of drug manufacturers and their distributors.  
There are two notable features of Costplus Drug and GoodRx companies.  Unlike other drug plans patients do not have to become their subscriber. 

Table 1: Price comparisons


US healthcare system has serious issues. My conjecture is that US Legislators and policymakers have no real knowledge and/or grasp of the landscape. If they have any knowledge, it has been ignored. Drastic re-think is need. However, due to political and vested influence of many, an “ALL HANDS” re-think effort to handle the drug pricing, shortages and bring manufacturing home (7) would be needed. Patient to have the best pricing has to have knowledge of all offerings to make the best decision for themselves. This is not an easy task. Question is “Do we have what it takes to address the issues and simplify drug purchases?” or policy makers, bureaucrats will just talk about it and succumb to political pressures and do nothing?  
Girish Malhotra, PE
EPCOT International


1.   Editorial Board Bloomberg: Are Generics Too Cheap for Their Own Good? November 16, 2023
2.   https://www.fda.gov/drugs/generic-drugs/office-generic-drugs-2021-annual-report
3.   https://www.census.gov/library/publications/2023/demo/p60-281.html
4.   Malhotra, Girish: Systematic Demystification of Drug Price Mystique and the Needed Creative Destruction, Profitability through SimplicityOctober 2, 2019 
5.   Costplus Drug Company https://costplusdrugs.com
6.   GoodRx https://www.goodrx.com
7.   Malhotra, Girish: Roadmap to Reduce Drug Shortages and Bring Pharma Manufacturing Home (US), Profitability through Simplicity, October 30, 2023
8.   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
9.   Malhotra, Girish: Opportunities to Lower Drug Prices and Improve Affordability: From Creation (Manufacturing) to Consumption (Patient), Profitability through Simplicity, March 9, 2018 
10. Malhotra, Girish: Improving Drug Affordability for the United States Populous through Alternate Business Models, Profitability through Simplicity, May 4, 2018
11. Amazon: Courtesy Dr. Albinus D’Sa Senior Advisor November 19, 2023
12. Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter April 2022

Monday, October 30, 2023

Roadmap to Reduce Drug Shortages and Bring Pharma Manufacturing Home (US):

Just the thought of drawing a road map to minimize drug shortages and bring pharma manufacturing home to US has been, can be and is a daunting task in the current environment. It can give all of us shivers. US is excellent to accept any challenge that has come its way. However, it has failed miserably to minimize shortages and put forth policies to bring at least generic and essential drug manufacturing home. Our inaptitude is very evident from the fact that we have been discussing these issues for more than TEN years and done nothing. Executive Orders have been ignored (1, 2, 3). Roadblocks are our current systems and ways drugs are sold under a mutually subsidized healthcare system. 


I am proposing a pathway to overcome these challenges, obstacles and resolve conflicts. I am confident that improvements can be made to assure drug shortages are alleviated and pharma manufacturing comes home. My conjecture is that a totally outlandish outlier effort is needed.


I propose that the application filed for a generic drug be granted or denied in 90 days of filing. This is bold and very different from the current unknown time that could be anywhere between 3-4 years. Unless such steps are taken to resolve the issue of drug shortages and bringing manufacturing home, the current landscape is not going to change. Details are discussed later. 


Proposed plan is of significant value to pharmaceutical companies as they will have start having return on their investment compared to multiple years it takes now. This will allow companies to meet the challenge and eliminate shortages. This program could be used by the companies to invest in new manufacturing technologies and methods (4,5) to improve their profits and compete for market share as is done in any free economy. Companies will have tested their manufacturing processes and systems to start production of quality products as soon as they receive FDA approval. 


I have no vested interest in the outcome of the effort other than minimizing agony of fellow citizens to have food and staying healthy rather than making a choice between either (6)


Again, we as a country, have done nothing to eliminate drug shortages and bring their manufacturing home. Vested interests and the current participants/players including legislators have prevented anything meaningful to happen. No one wants to jeopardize their profits and vested interests. It is time we act as one country. Even with this effort profits are not going to go away. They will get just get redistributed. 


Food and Drug Administration (FDA), Federal Trade Commission (FTC), US Legislators and other regulatory bodies will have to spearhead, support to create systems and implement what is necessary for the 90 day plan to work. Unless these entities act together in US’s national interest with the mission to eliminate shortages and bring manufacturing home, we will continue to have legislative hearings that are meaningless (too many to cite). 


Across the board team effort would be needed to adopt the suggested system. Trust between the regulated and the regulators to supply approved quality drugs is critical. Any company that participates in the outlined effort should be trusted to supply FDA approved drugs. Any failure would be a cause for they not be able to supply generic drugs to the US market for the next five years. 


Effort made here is not perfect but is a start. I am not against profits but in the current landscape drugs are distributed through selected channels with no open competition. No one knows the real price of drugs they use is THE problem. It has to change. In US’s mutually subsidized healthcare system price truth is lost and patients suffer. My conjecture is that the current drug distribution practices are THE bottleneck and THE problem.




For success of the proposed alternate pharma companies will have to commit to participate for at least five years. If they fall short on delivering product quality and/or stop supplying drugs within the year of their approval and/or collude with any other company (manufacturing or distributor) they will be barred from supplying drugs to the US market and/or establishing a manufacturing plant in US and its territories for the next five years even if they are a current supplier to the US market. With higher than current profits and US’s open market and size companies will be continually vying for entry. This will be an excellent opportunity for generic pharma companies. Purpose of short filing and approval times is necessary as it will minimize shortage time and companies will realize faster and higher return for their investment.


Companies who participate in eliminating shortages and producing generic drugs in US will have to abide by extremely strict code of conduct and compete in open market. Like any other competitive business only the best will survive. They will use internal cost and profitability analysis (4) to determine their participation. Companies will compete for the customers through open market competition i.e. competitive pricing and drug efficacy. Use of innovative technologies and their application and methods (4,5) will guarantee them cost advantage. Knowledge and creativity of company personnel could be put to test. Companies will have to shed technologies that have been used for the last 60+ years (4,5). No one would like to admit this but the current manufacturing methods are mortar and pestle technologies of yester years and  need to be upgraded. It is time and challenge here might get them there.  


Use of drug tier (7) system, an unnecessary bureaucracy, is a needless drug segregation system. It limits competition between companies who produce FDA approved drugs. It needs to be abolished. Direct competition between companies to cure the same disease will keep the quality high and prices competitive. Again better manufacturing technologies and creativity will be a win for the patients. 


Generic drug producers will sell directly to the patients through mail order or similar channels thereby bypassing the existing channels that are controlled by limited distribution companies. Use of existing distribution channels is company’s choice. 


US’s mutually subsidized healthcare system camouflages the real drug price to patients. We have to remember that the mission of the current channels is to maximize their profits at the expense of patients. Affordability and shortages are not a consideration. 


Information exchange between companies and regulators:


Implementation of the proposed program could be a challenge for the regulators and the regulated.  For its success, current ways, methods and information required by FDA and submitted by each individual company may have to be modified. Participating companies will have processes that will deliver quality product as soon as their submission is approved in 90 days (8,9,10,11). This approval time is the KEY to the success of the proposed program. Process information and methods submitted will be used to produce the approved product.


90 day approval requirement is a quantum change from the current practices. USFDA might have to modify its current ways and methods for the companies to submit information about their drug manufacturing methods, their efficacy and performance. There could be significant resistance within FDA and pharmaceutical companies. However, these changes are necessary if US wants to minimize shortages and wants to bring pharmaceutical manufacturing home. We have procrastinated for too long and overlooked needs of its population and national security. 


For program’s success information required by FDA and/or other regulators has to be such that its personnel (chemists, chemical engineers, quality control) based on their experiences can envision every detail of the process (process, equipment, operating instruction, test methods and product quality specs etc.) without visiting the production site. FDA might have to create information templates (10, 11). These will make the basis for complete information and may allow FDA to ask for any additional information within 10 days of submission of the application. FDA will have 90 days to grant and/or deny from the date of filed application with clear explanation of every denial. Any falsified information submitted by the company will be grounds for barring the company to be in the US market for five years.  


FDA (Food and Drug Administration) publishes performance standard for each drug’s dispensable form. They should be available to every manufacturing entity who would like to produce and supply the drugs to the US market. 


It is expected that company’s staff is proficient in process development, manufacturing practices and product quality requirements from the onset. Same is expected at every filing company. Each  participating company would have to test its chemistry, process and methods so that the production of quality product is flawless. In their application they will have to include process equipment, manufacturing process, operating instructions, test methods, product specifications and other quality information etc. for their active pharmaceutical ingredient (API) manufacture and formulation methods and proof that the product meets FDA established finished performance standards. Again, information submitted by the company should be sufficient, clearly stated and would be used for every individual generic drug approval submission. Good Manufacturing Practices have to be followed.


It is critical that every manufacturing company provides necessary details that will allow the application reviewer adequate information so that the s/he can envision the process, the equipment and various test methods to grant and/or deny the filed application. If the information asked and provided does not provide the necessary data, it could result in denial of commercialization of the drug. An oversupply of information is always helpful.  


Using the filed information regulators from day of receipt will have 10 days to respond for every submitted application to the company for its completeness. If all of the information is not submitted from the onset, application most likely would be rejected in 10 days from the day of receipt. Thus, it is very critical that FDA creates near perfect information submission system that companies will use for application submission and evaluation. If complete 90 days from the filing date FDA will have to grant and/or deny their application. It will have to give definitive reasons for rejection. 


If the company is to produce the same drug at more than one site, it has to submit individual application and the results of the produced product from each site in their application. Any inaccurate information that will influence approval of the application will become ground for rejection and bar the company from any subsequent filing for the same drug to USA for ONE year. 


Compiling information can be a challenge but in the interest of customer safety and product performance, accuracy is a MUST. Perfection of information is expected as life depends on them when used. Regulators will have no hand holding meetings with companies as it is done today.  


To assure companies are producing and distributing drug per their approved filing FDA would randomly check the distributed finished drugs against the quality claims of each company. Independent labs can be used to test products that is being sold. Any deviation/discrepancy will be grounds for disbarment for supplying drugs to the US market for the next FIVE years. Regulators will randomly perform unannounced inspection of the facilities producing drugs being distributed in USA. Company cannot prevent unannounced inspections in their respective countries. 


For the outlined roadmap to succeed it is extremely critical that the information exchange between the regulator and the regulated is very accurate. This will allow each side to have an accurate understanding of the process being used to produce the desired product. There cannot be any ambiguity as inaccurate information will not allow approval of the process and significant monies will be lost. Core competencies and perfection of each team would be tested. 




Each pharmaceutical company that can supply approved drugs should use distribution channel of their choice to compete and sell the drugs to the directly to patients. Direct sales are the key to the success of the proposed plan. Each finished drug product manufacturer like automobiles, smart phones or laptop computers that have equivalent functioning will compete on performance and price. Current distributors can participate but cannot prevent entry of others distribution channels as long as USFDA approved products are being distributed. 


Since there will be no drug tier (7) system competition between drug companies for the sale of their FDA approved product/s, patient with the advice of their healthcare provider and product price can decide on the drug they want to use. 




If any company is found to be colluding with any other drug producer, distributor or channel to limit availability of the drug and/or increase the selling prices each would be barred from supplying drugs to the US market for the next FIVE years. FTC and each US state can investigate. Companies being investigated cannot distribute or sell any approved drug/s during the course of investigation. Companies for every frivolous investigation would be reimbursed equivalent of ONE year’s revenue for that drug. Use of ombudsman might be necessary for any conflict resolution.


US Production: 


Companies opting to produce/establish manufacturing facilities in USA using the FOUR State Model (8) should be given preference. 

It is expected that the companies who compete directly for the customers will innovate their manufacturing technologies (4) and methods and compete based on product quality. Open competition will benefit US population. My conjecture is that it will lead to manufacturing technology innovation, higher profits and higher quality products for the producing companies. This will be for US in general as it will bring new employment to the selected areas. 


My speculation is that what has been proposed here could be strongly objected by FDA, FTC, drug conglomerates and members of current distribution system. Legislators should back and take a lead for such proposal. I expect that in an open market, quick approval and competitive drug distribution system, drug efficacy and price would level the playing field, reduce shortages, bring pharmaceutical manufacturing home and make drugs affordable. US being the largest generic market, companies would compete on the basis of drug quality, performance and price. It will be a win for US patients and best of the generic pharmaceutical manufacturing companies. Procrastination and meaningless talk about drug shortages and bringing manufacturing home has to end. It is TIME. 


Girish Malhotra, PE


EPCOT International




1.     Executive Order 13588 Reducing Prescription Drug Shortages, October 31, 2011, Accessed August 31, 2020 

2.     Executive Order 13944 https://www.govinfo.gov/content/pkg/FR-2020-08-14/pdf/2020-18012.pdf Accessed April 26, 2022

3.     Executive Order on America’s Supply Chains https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains/ Feb. 21, 2021 Accessed May 30, 2022

4.     Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation Accessed February 28, 2022

  1. Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011 

6.     Malhotra, Girish: Drug Prices: Food vs. Medicine - A Difficult Choice for Some Profitability through Simplicity June 16, 2011

7.     Understanding Drug Tiers Accessed October 22, 2023 

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: US’s Self Sufficiency for Generic Drugs: A Supply Dilemma and Potential Solutions, Profitability through Simplicity March 31, 2022 

10.  Malhotra, Girish: Can the Review and Approval Process for ANDA at USFDA be Reduced from Ten Months to Three Months? Profitability through Simplicity, March 25, 2017

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

Thursday, September 21, 2023

Marriage of Science and Technology in Active Pharmaceutical Ingredient (API) Manufacturing and their Formulations: Is it for real?

I have been a practicing chemical engineer more than 55 years. When I was part of the corporate world, I had the opportunity and privilege of working with the most creative and daring chemists and chemical engineers who practiced and taught me and others how science and technology discussed and reviewed in our text books can be married to create excellent manufacturing processes that produced quality product all the time. If there were bumps, we considered them as learning experiences. We learnt, improved and commercialized better processes than originally conceived.   

For the last 25+ years I have been reviewing and discussing application of science and technology to simplify and improve their application/adoption in the manufacture of fine/specialty chemicals that include API, coatings, resins and polymers. APIs are no different from specialty chemicals. One extends life and the others improve life style. APIs are formulated with inerts to facilitate dispensing. 

Many might disagree with this statement but the unit processes (1) used in synthesis of both (APIs and other chemicals) are exactly the same or similar. Same unit operations (2) are used. Basic point is API manufacturing and their formulations are no different from any other specialty chemical manufacturing with the difference being the first has to meet a distinct and strict quality regimen. 

Kranzberg’s Laws:

A while ago I came across two papers “The Unity of Science - Technology” (3) and “Technology and History: Kranzberg’s Laws" (4) written by Dr. Melvin Kranzberg and I thought it is best to share. Even though written about 50 years ago, they are worth a read by every “C” suite occupant especially by gatekeeper of every investment for products and their manufacturing that include pharmaceuticals and fine/specialty organic chemicals. Every company can benefit.   

In 2017, these laws written over 50+ years ago, at the dawning of smart phones and social media, reappeared in The Wall Street Journal (5). Most may not have heard of these laws. I equate them to technology’s technology’s Hippocratic Oath (6). These have been applied in the development of products and will continuously be applied for better products, processes and every technological innovation.  They are: 


1.     Technology is neither good nor bad; nor is it neutral.

2.     Invention is the mother of necessity.

3.     Technology comes in packages, big and small.

4.     Although technology might be a prime element in many public issues, nontechnical factors take precedence in technology-policy decisions.

5.     All history is relevant, but the history of technology is the most relevant.

6.     Technology is a very human activity.

Pharmaceutical Industry: 

Review of these laws (4) indicates that their teachings can be easily applied to the pharmaceutical industry and used to improve the prevailing landscape. As I expressed earlier, it is possible that pieces parts of these laws are being applied unknowingly. Perspective presented is mine and is not influenced by any for profit and nonprofit entity. My discussion emphasis is on chemical synthesis part the drug manufacturing. These are very applicable to the formulations also.  

Dr. Kranzberg’s “The Unity of Science - Technology” (3) article is an exceptional summary of mutual relationship of science and technology. It tells us that their confluence can and does result in excellent products that are produced using excellent processes. I found the following excerpt from “The Unity of Science – Technology” (3) very interesting and apropos as it applies well to pharmaceutical products, their manufacturing technologies for API production and formulations. 

“History suggests that science and technology, though wedded today, went through a long, indifferent courtship. They grew independently, almost oblivious of each other’s existence. Each made a point of ignoring the other’s presence, or took scornful note of it. Upon reaching the age of puberty-the Scientific Revolution in the case of science and the Industrial Revolution in the case of technology - mild flirtation ensued. There were in tentative, even furtive, meetings of the hands, shy glances, and a few reluctant embraces. 


The marriage, when it came at last, was a marriage of convenience and necessity, certainly not love match. Insofar as military needs helped bring about many a daring and secretive meeting, the ceremonies, when finally reached, can be called a shotgun wedding; and the couple, predictively, have not lived happily ever after. 


Each partner has retained a good deal of independence, though lately both have been having identity problems. There are constant bickerings about who is contributing most to the marriage. Frequently, they are not on speaking terms. They quarrel over mutual responsibilities, the education of their offspring, and, as might be expected, the household budget. 


It is a very modern marriage, without any nonsense about merger in the old common law entity of the dominant male who owns all the property and is liable for all of his wife’s slanders and crimes. Science and technology live independently, yet coordinately, as if they had but one joint bank account and one car. Divorce is frequently discussed. It is invariably rejected, however, because of scandal which will surely deface public image of the parties and because, I suspect, of the indisputable pleasures of the hurly-burly on the chaise lounge, not to mention the learned faculties of the bed.”


Articles (3, 4) are worth a read for everyone in “C” suite, technocrat and especially gatekeepers of every investment. They go back as much a 50+ years but the content of these is very applicable even today especially in the manufacture of APIs and their formulations. 


Pharma’s Birth:


My assessment is based on the fact that the pharmaceutical industry has very diligently applied “Kranzberg’s Laws (4)” to the drug discovery part with the recognition that some chemical molecule/s have disease curing value. This started at dyes and chemical companies (in late nineteenth century and first half of the twentieth century) (7) . Due to excellent profitability to serve human needs, many 

companies switched from fine/specialty and dye making to become a pharmaceutical company (7). In this transition companies have overlooked manufacturing excellence. 


Companies realized that the synthesis and formulation of disease curing molecules to dispensable dose could be done by fitting the manufacturing processes in the existing equipment. Processes were/are generally not optimized. As long as the equipment was clean and quality product can be produced, need for product specific equipment or optimized perfect process was/is not necessary. Quality repeatability is paramount. Due to high profitability, discovery of disease curing molecules and speed to market were/are the mantra of the pharma companies.  


To reiterate, the need to invest in product specific manufacturing technologies (7,8,9,10) exist but have been overlooked. Companies and regulators have achieved quality by repeated analysis/testing and cleaning the equipment between batches of same/different products (11). All of the associated costs are passed on to the patient who needs her/is medicines to extend life. Equipment makers have also benefited from this scenario as the equipment is being used in batch production (12) even if the same equipment was/is or could be used in the fine/specialty chemical sector for continuous production (13) of chemicals. Regulatory requirements (11) and the current level of profits from the current model could be an encumbrance and be in the way of pharma’s manufacturing technology innovation. 


To summarize pharma’s current scenario, one could say the marriage between science and technology, when it applies to manufacturing, exists but is not perfect. Has the US’s current drug distribution system the cause of the lack of manufacturing technology innovation. This is my perspective. If pharmaceuticals had been like other industries, i.e. direct competition to customer allowed everyone will see significant advances in manufacturing technologies. Has the drug distribution system stymied manufacturing innovation?    


Pharma’s Marriage:


In the pharmaceutical industry, drug discovery/development and their manufacturing, we can say, are two marriage partners.  


1.     Drug discovery 

2.     Drug manufacturing


They live together but as stated by Kranzberg (3) do not have an excellent marriage. It is best to explain this relationship. Again, perspective presented in mine.


In PhRMA’s marriage a significant part of the relationship is missing. I call “drug discovery” the science and “drug manufacturing” the technology of the pharmaceutical world. Their current relationship can be called as “marriage of convenience”. Many would disagree but this is my perspective. The most meaningful missing part of this relationship is the mutually combined creativity and imagination of each partner to produce perfect quality product using an excellent manufacturing process.  


“Drug discovery” happens due to creativity and imagination. Same traits are needed to create excellent “drug manufacturing” processes but the speed to market, past practices (of about 70+ years), intervene. This could also be due to deficit or shortcomings of people experience, lack of creativity and imagination excellence as the developed product is scaled up and commercialized. Most of the time the commercial processes look like a larger laboratory process. 


We are taught the fundamentals needed to scale up. However, speed to manufacture negates or minimizes application of knowledge learnt, creativity and imagination to create and commercialize excellent processes. 


Quality drug products are produced through repeated in-process testing, analysis and correction rather than through “outstanding processes” that will produce “on quality” products from the onset. Current practices have existed for the past 60+ years. In a competitive world, pharma’s practices would be considered expensive, unaffordable and companies would fail. However, in the pharmaceutical world these costs are absorbed by the patient as they want to extend life. Actually companies have thrived. 


Process developers create a laboratory process. Most of the time they do not understand the pain chemical engineers have commercializing the developed process. Only way the minimize the pain is to get the village (7)involved from product inception. Village consists of chemists, process development chemical engineer, manufacturing, maintenance, accounting and purchasing (7). This lets the most creative process commercialized in the shortest time and enhance profits. Patent life could increase. 

Generics also need to use the village (7) from the onset. As stated earlier traditions of the last 60+ years rule the landscape where the village (7) is generally not involved. Like brand drug companies, generics have to have excellent processes and need to optimize as they have to compete with other producers of the same product. They can react to shortages quickly. 


In recent years to get around the “internal talent deficit”, drug discovery companies have and are conveniently relying on using/having surrogate relationships with CDMOs (contract development and manufacturing organizations) and CMOs (contract manufacturing organizations) (14). Developed chemistry/manufacturing process does not have to be manufacturing ready optimized as it is going to be outsourced to a CMO/CDMO (14). These are marriages of convenience. In these relationships, speed to market still intervenes and even might take precedence. Many might not recognize or want to accept pharma’s this posturing. However, it is a reality. 


Outsourced organizations are taking processes that are developed in-house, tweak them to fit in their equipment to make them better. They may not be optimum as speed to market is still the key. We have to remember that anytime a product and its process is presented to the regulators, it cannot be changed. It is carved in stone. Any re-approval/modification can be expensive. This prevents and/or minimizes process of continuous improvement that is expected and is normal for every manufacturing process. 


One could question the current regulations, especially when it comes to process improvements. Most likely regulator’s current posture is due to companies not taking their responsibility to produce quality drugs seriously. This raises a question. Are the in-process testing requirements too stiff or have the regulations gone too far to create high drug prices and ongoing shortages? Current drug distribution system (15) prevents direct patient competition and is also part of the problem (10). Competition creates excellence in manufacturing technologies. It is the missing element in pharma.  


There are ills with the current manufacturing practices. They come from low process yields due to unoptimized processes and fitting processes in the available equipment. Processes fitted in the existing equipment can only work with high solvent use, even when recovered and recycled (7, 8, 9,10). This results in pharma having the highest emissions per kilo of the products (16). Some in the pharmaceutical industry do not accept such numbers. 


Can Marriage of Science (Drug Development) and Technology (Drug Manufacturing) be Saved? 


In brand pharma’s marriage “drug discovery” development of new drugs for various ailments was and is the basis of each company’s mission. From inception of the drug industry, as discussed earlier, new drug discovery has been an internal task or comes through acquisitions. Commercialization was an internal thing. However, it is being increasingly outsourced to CMO or CDMOs (14). Due to speed to market, process optimization and environmentally sound process (technologies) have gone by the wayside. Patent life of the brand drug also influences commercialization speed. Generally companies own the product and the process. Outsourcing is minimizing this ownership. As indicated earlier getting the village (7) involved might extend patent life. 


Generic API drug and their formulators generally will do their best to have an optimum process. They have time before they commercialize. Most of them may improve the API chemistry. However, it will still be executed using a batch process (12) in the existing equipment. This is true for API formulations also. Their current business model prevents them to do that even when better processes can be developed and commercialized (10, 17, 18, 19). Since these companies know the molecules they want to produce, they should include the village (7, 8, 9) to create, develop and commercialize a very environmentally friendly continuous process (13) vs. a batch process (12). Effort is needed. 


Technologies and methodologies exist and continue to evolve (7, 8, 9). Companies have had these opportunities to take advantage of economies of scale but have followed age old practice of the fitting processes in existing equipment. Best way to describe the landscape is existing processes are essentially an extension of the laboratory process and use of existing equipment. Not many have explored use of modular technologies (7). My conjecture is that past tradition are an obstacle. 


Inclusion and use of modular processes and operations will need experienced resources which they might not have. Internalization of process development will fill the gap and can only happen if the current business model is changed. Likelihood of that happening is very dismal. Only an “outlier pharmaceutical company” using a different product and process development and manufacturing philosophy will attempt it. Every such investment will have to be internally justified. 


On the pharmaceutical landscape not enough effort has been devoted to evaluate alternate business options. Many could say they do not have the time. They do have time. All along they have been looking at the glass half empty vs. being half full. They have not evaluated long term impact of their current practices. As suggested earlier manufacturing process development effort has to be put in from inception of drug molecule (7, 8, 9, 10) to create excellent processes. 


Review of the various synthesis chemistries suggests that the laboratory chemistry has been scaled up to produce molecules in the plant and real chemical engineering may not have been applied to create excellent processes. Process developers need to exploit physical properties, mutual behavior of reactants and unit operations to create excellent processes (7). This observation is based on their process descriptions. My conjecture is that the total time spent could be less than the current time to scale-up and commercialize if village (7) is involved from molecule inception.  


Outsourcing of process development, manufacturing and regulatory compliance could give the companies short-term profitability boost but for the long term it can be a disaster for sustained better quality, drug affordability and environment as CDMO companies will not be putting any effort in continuous improvement to lower costs. Their interest is to produce products for their profitability and not for sustained availability. They could dump the existing lower profitability businesses. In addition, companies will not have the marriage they started with but would switch to new products that improve their own profits. 


It is well documented and known best marriages are a continuous effort. Temporary relationships with CDMOs/CMOs are fragmented marriages and long term not the best operating option on the pharma landscape. Continued outsourcing practices could progressively lead to increased shortages. It will be bad for the pharma companies as they will lose their public image, product and process technology superiority leading to some of the companies disappearing in the sand storm they have been creating in the recent years. To save marriage of Science (Drug Development) and Technology (Drug Manufacturing) “outliers” are needed. Any volunteers? 


Girish Malhotra, PE




EPCOT International 

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7.     Malhotra, Girish: Active Pharmaceutical Ingredient ManufacturingDe Gruyter April 2022

8.   Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011 

9.   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

10.  Malhotra, Girish: Profitability through Simplicity

11.  Facts About the Current Good Manufacturing Practices (CGMP) May 31, 2023

12.  Batch Production http://bit.ly/31dzpo3

13.  Continuous Production https://bit.ly/2Rp3Xlu

14. CMO/CDMO https://en.wikipedia.org/wiki/Contract_manufacturing_organization

15.  Malhotra, Girish: Opportunities to Lower Drug Prices and Improve Affordability: From Creation (Manufacturing) to Consumption (Patient), Profitability through Simplicity, March 9, 2018

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

17.  Malhotra, Girish: Capitalizing on Mutual Behavior and Chemical Reactivity of Chemicals, Profitability through Simplicity, May 29, 2023 

18.  Malhotra, Girish: Chemicals tell us how to exploit their behavior for better processes. Clues are ignored. Should we?, Profitability through Simplicity June 20, 2023

19.  Malhotra, Girish: Considerations to have an excellent environmentally friendly and economic chemical process? Profitability through Simplicity, August 28, 2023