Pharmaceutical and the Drug Distribution companies have “Profitability through Sick Care” as their mission. One invents new drugs/treatments and the other distributes them. Bottom line: PROFITS are the goal and pharmaceuticals just happen to be the media. “Simplicity” in product and process development and manufacturing should always be on the forefront as they make sure that the companies are profitable. We are short on “Simplicity” aspects.
Recently three EOs (1, 2, 3) were promulgated. Each has ambitious goals. However, based on the performance of the past EO’s (4, 5, 6) even after disbursing money (7) their success in delivering what is expected (domestic manufacturing and lower pricing) is highly unlikely unless methods of their execution are changed. In order to meet the objectives of the EO’s (1,2) fundamental changes are needed. Suggested implementation methods are reviewed. Perspective presented here is mine and is not influenced by any “for profit and non-profit” organization/s. Processes suggested in the three EO’s (1,2, 3) most likely will not lead to expected results as they do not have a total timetable. This is obvious as they suggest a time of 180 days for initial review and analysis.
Without any deadlines and time line goals spelled in the EOs (1, 2, 3) a PROJECT CZAR with “accountability responsibility” has to be appointed. S/he has to be directly accountable to the President of The United States. Without such person most of the TORS ”DistribuTORS i.e. PBMs, LegislaTORS, RegulaTORS, LitigaTORS and even the produCERS and/or other unknows/knowns due to their influences and vested interests, it is very possible that these EOs (1,2,3) will meet the fate of earlier EOs (4, 5, 6) and will end up in a “do nothing” pile. Very bold and aggressive actions are needed for their success (8, 9, 10, 11). As Yoda says “Do or do not. There is no try”.
EO 14293 (1):
“Domestic production of critical drugs” is a noble objective. Success of this EO is dependent on fixing the current broken regulatory filing system. No one would admit that. Broken are FDA’s needed filings requirements for regulatory approvals methods and pharma’s manufacturing technologies. EO 14293 (1) does not acknowledge these but this is a reality everyone knows. If everything was good there should not be any or very little back and forth between regulators and companies about the information exchange and approvals.
Improvements to the existing filing and review system/methods have to be created, tested and implemented. They would be based on the information available and used in the current methods. Fallacies of the current system can be used as an example and need to be corrected. To meet the objectives EO (1, 2, 3) improvements in both, regulatory approval (FDA) and manufacture of a drug, are a must. It is my conjecture that if an attempt is made, we could bring critical and generic manufacturing home within ONE YEAR (8, 9, 10, 11). This will require focus and effort.
Alternate to building a new plant/s, it is possible to repurpose existing fine/specialty chemical plants. Creative use of the available existing equipment along with process robust design not only can minimize investment, commercialization time (12, 13, 14) and but also lower total manufacturing costs. Chemical engineers are very well trained in this task. To experienced chemist and/or chemical engineer this is not difficult. On the pharma manufacturing platform chemical engineers and chemists are still fitting their processes in the existing equipment (15, 16), an 60+ years old practice. Alternate process equipment and manufacturing process options need to be investigated (12, 13,14). They have to be done by the process engineers and process chemists at the company sites.
Improvements at FDA:
Results of regulatory process approval reduction time will lead to reduction in New Drug Application (NDA) and Abbreviated New Drug Application (ANDA) approval times (10,11). Pharmaceutical industry and US population will benefit immensely. It will lead to higher return on US Tax Payer investment through faster availability of brand and generic drugs. Every manufacturing company will benefit. Done correctly it could lead to bringing generic drug manufacturing home. FDA’s NDA and ANDA approval processes have to be equated to a “manufacturing process” where continuous improvements are needed. Without these improvements the topic of NDA and ANDA filings and their timetable will be discussed perpetually. As suggested earlier a CZAR is needed for the EO’s (1,2,3) to become a reality and till that happens these EO’s or like other EO of past (4,5,6) will not achieve their goals.
In Sec. 3 EO 14293 (1) acknowledges that FDA needs review of the current regulation processes. Filing instructions (equivalent to manufacturing process instructions (12) for NDA and ANDA have to be precise and simple that any educated person can fill them and the completed application will lead to approvals in short time like 90 days from the initial filing.
A quick method is suggested. If within 15 days of NDA and ANDA submission there are deficiencies, applicant should be informed. The filing company would have another 15 days to complete and re-submit the necessary information. If all of the submitted information is acceptable, the applicant should be informed and this would give USFDA another 60 days to grant and/or deny the filing (8,9,10,11). It is my perspective that changes at FDA’s review and approval process will also fulfill requirements of Section 9 of the EO 14293 (1).
In the pharmaceutical industry process development for the brand and generic drug products paths have commonalities (12,13,14). For commercial manufacture companies have to shed their current version of laboratory bench top or similar processes that have been practiced for the last 60+ years and practice what is science and engineering based (12, 13, 14). Pharmaceuticals have to move from equipment centricity (15, 16) to process centricity (20). Nothing new has to be invented. Only fundamentals of chemistry and chemical engineering need to be applied intelligently from product and process inception by the village (12, 13, 14) for the production of brand and generic products.
Section 3 of EO 14293 (1) mentions “emerging technologies” that enable the manufacturing of pharmaceutical products active pharmaceutical ingredients, key starting materials, and associated raw materials in the United States”. I do not know what are these “emerging technologies” as they have never been explained by US FDA citing verifiable commercial examples. Manufacturing technology development and their practices are product specific, it best to be done by the practitioners of the technology rather than being suggested by the regulators who do not have much hands on experience in their development and commercialization.
It is ironic that the manufacturing processes and practices at most pharma companies are about 60+ years old bench top methods. FDA staff should be focusing on simplifying the NDA and ANDA approval methods and times rather than talking about “emerging technologies”. My conjecture is that FDA’s shortened approval time and direct marketing to patients, as explained later i.e. quicker and higher profits, will be the best incentive to develop and commercialize better technologies. Higher and quicker profits will be the result.
Lately unnecessary jargon (old methods/technologies in new names; too many to name) are being introduced. Still they have to be commercialized by the companies. FDA cannot and should not coax companies to consider what companies cannot justify on commercial scale. They have the process developers, designers and manufacturing personnel who acting as the VILLAGE (12,13,14) can design and commercialize economic product specific processes. It is suggested that the EO 14293 (1) CZAR consider options discussed (8, 9, 10, 11, 12, 13, 14) and use process designers/developers at the companies with manufacturing experience do their task.
Hatch-Waxman Act (17), it impacts the pharma landscape immensely is not mentioned in any of EOs (1,2,3) . It has to be revised and updated. Since the discussion here is about domestic manufacturing it is suggested that FIVE years before a patent is to expire brand company US FDA should make public every detail of approved drugs dosages, its drug performance and profile. By having the drug details companies that want to produce the generic drug will develop the best manufacturing processes, technologies that are economic. FDA approvals will also be fast. Direct sales to patients present an opportunity to manufacture the drug with the best process, highest quality at the highest profit. Every “TOR” mentioned earlier will make sure there are no changes made in the current practices and such disclosures do not happen. In reality TORs will make every attempt to swing the pendulum to tighten and extend current provisions of the Hatch-Waxman Act (17) in their favor. Artificial Intelligence sites (18,19) when asked “Does Hatch-Waxman Act (17) needs a change?” It suggested it is 40 years old and categorically needs revisions and simplification.
Improvements at Pharmaceutical Companies:
Section 1 of the EO (1) discusses the time it takes to build a new manufacturing facility in United States and is equally difficult to repurpose existing idle facilities to produce active pharmaceutical ingredients and formulate them. I disagree with the time suggested to repurpose a facility to produce Active pharmaceutical ingredients (API) and formulate them (8, 9,10, 11). It is my belief that with FDA fixing its filing, permitting and approval processes (NDA and ANDA) and pharmaceutical companies following good design and engineering practices (12,13, 14) will move companies practice of fitting processes in existing equipment (15, 16) to process centricity (20). This may sound a daunting task but with the equipment, sometimes available at the pilot plants and idle plants, can be repurposed to accommodate most unit processes (21) and unit operations (22). Out of the box thinkers and outliers are needed. They exist at every pharmaceutical company especially at their older cousin fine/specialty chemical company.
It is my assumption that improvements in regulatory approval i.e. shortening the approval times for the brand companies will extend their patent’s life i.e. higher profits. Brand and generic companies will also benefit as they will have better asset utilization (8, 9, 23). It is my expectation that real application of chemical engineering and chemistry will result in “Profitability through Simplicity”. Discussion about Good Manufacturing Practices (cGMP) (24) are not included in the discussion as they are the corner stone of pharmaceutical manufacturing and expected to be followed.
EO 14297 (2) and EO 14273 (3):
Ways to implement EO 14293 (1) has been discussed earlier. Its inclusion would be needed for implementaion of EO 14297 (2)and EO 14273 (3). This going to be extremely challenging and difficult as the healthcare distributors (PBMs), their allies and every brand pharmaceutical company would come out with every INFLUENCER (TOR), explained earlier, against all three EOs. Reasons are very simple. They will have to change their business practices of the last forty plus years significant percentage of their profitability could be a stake. They may have to re-learn many things. Change is difficult. Hatch-Waxman (17) as discussed earlier has to be updated.
Just to refresh TORS are LegislaTORS, RegulaTORS, LitigaTORS and the DistribuTORS. However if EO 14293 (1) is properly implemented brand pharmaceutical companies and their TORS could and would benefit. If the distribuTORS do not change their methods to accommodate and include EO 14293 (1) in there business practices, US Government has another way to force the change by letting the generics be sold directly by their producers by passing the distributors or set the sale prices so that the profits at the companies are not severely compromised. Either way PBM profits would be impacted. Change will be challenged. Federal Trade Commission (FTC) will have to establish very strict ground rules to prevent direct sale price collusion. Since profits are involved business creativity and imagination of US entrepreneurs will play a strong roll in pharma’s distribution landscape. This will be a challenging regulatory road.
US Government has to eliminate drug TIERS (25), an artificial way instilled by the distribuTORS to sell same disease curing drugs at different prices. Since US FDA approves different drugs for the same disease there should not be any TIERS (25). It would be best if these are eliminated. Let the drug price, patient and their doctor decide what is best for the patient. This along with direct sales to patients, due to their vested interests, will be resisted by the three TORS i.e. Pharmacy Benefit Managers and their allies distribuTORS, LegislaTORS and LitigaTORS. Direct sales to patients is the best option to lower drug prices. As I have indicated earlier through better technologies and manufacturing practices drug producing companies will have higher profits. This will also bring innovation in drug development, manufacturing and distribution methods.
Brand drug sales in USA and other countries are sold at variable prices. US prices are the highest. Explanation of high US prices is justified as recouping the product development, commercialization costs and limited patent life. This does not make sense as many drugs under patent are sold at significantly lower prices outside USA which happens to be about be less than 5% of the global population. My conjecture is that by selling brand drugs at affordable prices in most countries brand companies are recovering their fixed manufacturing costs. US Due to world’s current highest prices government has a justification for using the Most-Favored-Nation prescription drug pricing. US government will have to negotiate with the brand companies US selling prices. Brand companies and PBMs will have to negotiate sale prices and that would treading on a new turf.
Selling price comparison is illustrated in Table 1.
Drug | Company | US Price | Overseas Price |
Sovaldi | Gilead | $84,000 for 84 doses (26) | $900.00 for 84 dose India |
Eliquis (2.5 mg) (27) | Pfizer/Bristol Myers | $ 9.67 per tablet | $ 0.68/ tablet (International price) |
Table 1: Drug Price Comparison
Table 2 is a rough calculation of the factory cost and selling price of Eliquis. Numbers are best estimates. Cost analysis of other drugs are reviewed (12, 13, 28).
Eliquis production cost | |
API cost, $/kilo | 4,779.00 (29) |
Conversion cost to tablet | |
Inert ingredient cost, $/kilo estimate | 5,000.00 |
Labor cost, $ kilo | 4,000.00 |
Factory cost, $/kilo | 13,279.00 |
ONE KILOGRAM produces 1,000,000 tablets of ONE milligram. | |
Each Eliquis tablet is 2.5 milligram. ONE kilo will produce 400,000 Eliquis tablets | |
Factory cost of each 2.5 mg tablet, $ = 13,279/400000 = 0.034 | |
Profit margin 200% | |
Factory Selling price, $ per tablet = 0.068 | |
Table 2: Manufacturing Factory Cost (estimate)
Some of the cost numbers (ingredient and labor) used are high estimates. Even with these numbers the factory selling price is just 10% of the international price and less than ONE percent of the US price. Similar cost examples can be developed.
If US Government sets the selling price to be e.g. $5.00 per 2.5 mg tablet, Pfizer/Bristol Myers Squibb are not going to like the numbers. However, to recover some of the lost dollars this gives them an opportunity to review their costs associated with R&D, Process Development, Manufacturing and others to see how they can become more efficient and recoup some of money. There will other latent advantages from developing efficient processes (high conversion yield). Similar analysis for the generic drugs illustrates the price differentials between US price and prices in India (12,13, 28).
It is striking that the same drug is sold at vastly different prices (27) outside USA. Is it a case of the pharma company’s using overseas sales to cover their fixed costs or is it a case of price negotiation or whatever they can get away with? Gilead was selling AIDs drugs at exorbitant prices in Africa till Cipla, India (30) challenged its prices and sold the drug at $350.00 per year, an affordable price. Someone stood up to big pharma and the world benefited.
Summary:
Recent EO’s (1,2,3) are suggesting that FDA, pharmaceutical companies and their distributors re-look at the landscape of the last forty years and change or the change will be made for you. The following needs to happen:
1. Review, facilitate and shorten FDA’s review and processes
2. Hatch-Waxman Act (17): Overhaul needed to minimize patent abuse leading cause of high US drug prices
3. Repurposing using process centricity (20,21) is easy and has to be carefully thought through
Benefits of improvements would be higher profits for the pharma companies through faster approvals, longer patent life, use of better process centric (20) manufacturing technologies and lower pollution (31), lower drug prices, real possibility of brining manufacturing home. However, EO’s (1,2,3) suggesting 180 day review essentially means nothing will happen i.e. dead on arrival. A very aggressive time table is needed for their incorporation.
As discussed earlier Hatch Waxman Act (17) needs to be updated to the current times and is overdue. It is interesting to note that AI platforms (CHATGPT and Perplexity) (18,19) suggest that the loopholes to stifle generic entries have been exploited. As suggested earlier all of the performance, purity, solubility and whatever data is necessary for its generic version should be declared by the patent holding company and USFDA about FIVE years before the patent expires. Congress will have to facilitate that but many of the TORS ( mentioned earlier) have and will resist any change. Only a Presidential action can change that. However, every business specially pharmaceuticals and their allies will say “SHAME”. FDA, a tax payer funded entity, often has taken side of the pharmaceutical companies. It should refrain from doing that. Neutrality is healthy in the long run.
Based on my experiences it is my conclusion that USA can achieve the objectives of the THREE EXECUTIVE ORDERS (1,2,3)provided it uses the RIGHT experienced personnel. The CZAR for this project has to report to the President Of The United States. Without that kind of accountability these EO’s are not going work. Implementation and incorporation is going to be a challenge. We have the knowledge and experience of pieces and parts but need to reconfigure so that US is not paying the highest prices for the brand and generic drugs. Effort would be needed. Let us give it a go.
Girish Malhotra, PE
EPCOT International
1. EO 14293 Regulatory Relief To Promote Domestic Production of Critical Medicines Accessed May 5, 2025
2. EO 14297 “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” Accessed May 15, 2025
3. Executive Order 14273 Lowering Drug Prices by Once Again Putting Americans First Accessed June 2, 2025
4. Executive Order 13588 Reducing Prescription Drug Shortages, October 31, 2011
5. Executive Order 13944 Ensuring critical medicines are made in US August 14, 2020
6. Executive Order 14017 America’s Supply Chains Feb. 24, 2021
7. Trump-era federal Covid contract recipient has yet to meet major deadlines Accessed May 17, 2025
8. Malhotra, Girish: An Outlier Plan to Bring Pharmaceutical Manufacturing to USA in One Year
Profitability through Simplicity April 28, 2025
9. Malhotra, Girish: Remedy of US’s Drug Supply Chain Shortages and Domestic Production of Generic and Brand Drugs Profitability through Simplicity, April 15, 2025
10. Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2019
11. Malhotra, Girish: US’s Self Sufficiency for Generic Drugs: A Supply Dilemma and Potential Solutions, Profitability through Simplicity, March 31, 2022
12. Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter April 2022
13. Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011
14. 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
15. Malhotra, Girish: Why Fitting a Square Plug in a Round hole is Profitable for Pharma and Most Likely Will Stay? Profitability through Simplicity August 1, 2014
17. Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman Act)
18. ChatGPT.com
19. Perplexity.ai
20. Malhotra, Girish: Process Centricity is the Key to Quality by Design, Profitability through Simplicity April 6, 2010
21. Shreve, R. N. Unit Processes in Chemical Engineering, Industrial and Engineering Chemistry,1954, 46, 4, pg., 672, Accessed June 22, 2020.
22. McCabe W. L & Smith J. M. Unit Operations of Chemical Engineering McGraw-Hill Book Company Second Edition 1967
23. Schrader, Ulf: McKinsey & Co. Operations can launch blockbuster in pharma, February 16, 2021
24. cGMP Practices
26. Washington Post December 1, 2015
27. Pharmacychecker.com Accessed June 1, 2025
28. Profitability through Simplicity
29. Eliquis API price https://www.pharmacompass.com/active-pharmaceutical-ingredients/eliquis June 1, 2025
30. Indian Company Offers to Supply AIDS Drugs at Low Cost in Africa February 7, 2001
31. Malhotra, Girish: NET ZERO for Active Pharmaceutical Ingredient & Fine/Specialty Chemicals: Nondestructive Creation, Profitability through Simplicity, November 7, 2024
