NET ZERO for Active Pharmaceutical Ingredient & Fine/Specialty Chemicals: Nondestructive Creation

Achieving NET ZERO ⁽¹⁾ has become the latest new and loud chant for the processes that produce Fine/Specialty and Active Pharmaceutical Ingredients (API). Pharmaceutical industry is known for its high emissions per kilo ⁽²⁾. Many do not want to acknowledge this. It is very possible to reduce/minimize the solvent use for every chemical synthesis process from the onset. Pathway to lower/reduce the solvent use for each product is “Nondestructive Creation” ⁽³⁾ i.e. commercialization of alternate processing method for each product from the onset. This will significantly lower the “Net Zero” number for each product from the onset ^{(4, 5, 6)} and can be applied to existing products. Creativity and imagination of everyone is welcome.  

 

It takes a whole village for an innovation to be developed, launched, and adopted.

— Edmund (Ned) Phelps, Nobel Laureate ⁽³⁾

 

Implementation of methods to achieve “Net Zero” requires effort of “THE WHOLE VILLAGE” ^{(4, 5, 6, 7)} (chemists and chemical engineers, marketing, financial analysts, supply chain professionals, quality control, regulators, maintenance, and manufacturing personnel) and has to become their religion and way of life. It is very likely that the effort might involve changes to how the chemistry is commercially practiced in the alternate equipment. Process will definitely involve reconfiguration of manufacturing/process technology and its execution. Done correctly the desired molecule and its performance will not change. I am sharing my perspective for the effort and is not influenced by any “for profit and non-profit” organization. 

 

Act of solvent reduction for every chemical process begins from the day of chemistry inception/conception as there is no tomorrow. Tomorrow never arrives as it will come tomorrow.

 

Each company can develop its own pathways. Based on my experience the simplest is to reduce the solvent use at every reaction step. That is easier said than done. It can be achieved by taking advantage of combination of physical properties e.g. melting point, boiling point and freezing point, mutual solubilities in different solvents, their mutual social behavior and chemical kinetics ⁽⁸⁾coined as sociochemicology ⁽⁹⁾. Their exploitation does simplify manufacturing processes.  

 

It is not only necessary but critical that for the long term benefit, intellectual property which involves how the processes are modified and practiced be internalized and protected at each company. Some new learning about how the unit processes ⁽¹⁰⁾ and unit operations ⁽¹¹⁾ are practiced might be necessary. Fine tuning of the existing processes/methods most likely will be necessary. For experienced chemists and chemical engineers it is very likely that the new learning to get to “Net Zero” will be minimal. 

 

It is expected and very likely that no new chemistries might have to be developed for the existing products. Current commercial  chemistries most likely will have to be executed differently in smaller/alternate equipment. In this effort interaction/mutual behavior, physical and chemical properties and reaction kinetics ⁽⁸⁾ of each chemical used and produced would have to be capitalized to simplify the processes. “Creativity and Imagination” of each member of the “THE WHOLE VILLAGE” ^{(4, 5, 6, 7)} team will be of utmost value. Process development chemist, engineer and members of the scale up team will play critical role in the effort. This will minimize implementation time. Following steps can be used to get to “Net Zero” and they are reviewed. 

 

1.     Sociochemicology ⁽⁹⁾ of chemicals

2.     Process centric designs 

3.     Creativity and imagination of the WHOLE VILLAGE ⁽³⁾

 

Each chemist and chemical engineer is familiar the above two aspects. Third is individual and collective experience dependent.  

 

Every chemical synthesis patent be, it a fine/specialty chemical or API walk us through the reaction mechanism. It is up to “The Whole Village” to harness it to create a minimum solvent use process. We are also taught all of the tools to do that unit operations ⁽¹¹⁾. Some are examples are discussed ^{(4, 5, 6, 7)}.  

 

Sociochemicology of Chemicals:

 

Sociochemicology ⁽⁹⁾ encompasses physical and chemical properties of each chemical and how they interact with each other. Mutual behavior of chemicals and processing equipment used in the process influence manufacturing methods and their execution. Each physical and chemical property needs to be exploited differently to create and simplify processes. This is emphasized as it has value for every process design.  

 

API and fine/specialty chemical industry is living with the tradition of using larger sized equipment to produce the end products. It is due to the fact that the equipment is available and can do the needed job.  

 

Round bottom flask and associated laboratory equipment does not allow exploitation of physical and chemical properties of the chemicals. Intent in the lab is to prove feasibility of the reaction chemistry. Scale up using larger available equipment is done, a tradition of SEVENTY PLUS YEARS ^{(4, 5, 6, 7)}. Laboratory does not have the provisions to experiment and demonstrate interaction of physical and chemical properties. They may be able to show feasibility but it is up to the chemist and chemical engineer “how to use them and simplify the processes”. 

 

We do not need to review the details of traditions as every chemist and chemical engineer knows them well. However, a brief of process development and commercialization would help. Generally a process engineer takes the information developed in the lab, proves its feasibility in a pilot plant and designs a process in a large reactor, a tradition of 70+ years. Since the commercial processes are “lab centric processes” and speed to market dictates commercialization, generally there is no or minimal attempt to minimize  the solvent use by evaluating and/or creating an alternate process. In pharma due to regulations after the fact does not happen. 

 

Process Centric Designs and Creativity and imagination:

 

Since most of the chemists and chemical engineers might not have the feel for the mutual behavior of chemicals ⁽⁸⁾ it can be a challenge to incorporate their nuances in actual designs. It will be necessary that due to non-availability of mutual behavior and other properties data might have to be generated internally. “Skunk works” ⁽¹²⁾ will be needed. It can be a place to experiment with alternate equipment and designs ^{(12, 13, 14)}.

 

My experience is that “process centric” designs will and do minimize solvent use. Creativity and imagination with process centric designs go hand and glove to reduce solvent use. Downsizing equipment will/should not change process chemistry but can change how the chemistry would be practiced. Such equipment is being used in chemical and other manufacturing industries ^{(12, 13, 14)}. They do lower the volume of solvent used per kilo from the current conventional agitated reactor designs. It is very possible that many could say that it cannot be done. Unless we try and consider such outlier/nondestructive creative designs ^{(4, 5, 6)}, “Net Zero” will not happen. 

 

Best is to share some examples. Most solid raw materials are generally fed in a reactor that has large excess of solvent (as much as 50%) that is used in the process. However, if the solid can be metered to the reaction system via an eductor ⁽¹²⁾ using the solvent used in the reaction, one can reduce the total solvent used in the reaction. This is especially true if a back mix flow process design ⁽¹⁵⁾ can be used. Such reaction designs along with an inline heater/heat exchanger ^{(12, 13, 14)} can reduce solvent use. Plate and frame heat exchangers ⁽¹¹⁾ have been used as reactors. It is critical that the chemists and chemical engineers have a complete understanding and command of the reaction kinetics ⁽⁸⁾. Depending on melting point and solubility of chemicals we are presented with many opportunities to reduce solvent use ^(4,5,6). 

 

As stated earlier mutual insolubilities and density differences ^{(8, 11)} can be used in many ways to facilitate and simplify processes. Some of the examples where solvent use can be significantly reduced/eliminated are reviewed ^{(4, 5, 6, 7, 16, 17, 18, 19, 20)}. There are many other examples are available in literature. One of the reasons for not incorporating many of such nuances in process design, my understanding, is the time pressure to get the product to the market. 

 

As indicated earlier almost every chemical synthesis patent shows us the pathway (reaction mechanism) to minimize solvent use i.e. direct how one can achieve “Net Zero”. Laboratory processes are fitted in the existing equipment that is available on the site, square plug in a round hole ⁽²⁰⁾. This happens as the chemical industry is tuned to using jacketed reactors for chemical synthesis, a 100 years old tradition. Most overlook how to exploit the reaction sequencing, kinetics ⁽⁸⁾ and sociochemicalogy ⁽⁹⁾  of the chemicals used and produced. Result is opportunity to lower the solvent use per kilo of the product is lost. 

 

Equipment used in other industries ^{(13, 14)} and some used differently in the chemical industry ⁽¹¹⁾ can reduce solvent use and facilitate the processes. To minimize solvent use “what if” comparison analysis is necessary to select the best equipment ^{(4, 5, 6, 12)}. At times best equipment may not be the normal agitated reactors. Inline heaters are all electric heaters and they not only minimize investment in external heat sources (boilers or hot oil heaters) but facilitate capitalizing on mutual solubilities ^{(4, 5, 6)} and reaction kinetics ⁽⁸⁾, thereby reducing solvent use for every reaction step. This value needs to capitalized on. It is time we do if we want to reduce solvent use. 

 

For example compared to conventional jacketed reactors inline electrically heated heat exchangers ⁽¹³⁾ offer much higher heat input (flux) per unit surface area (2.5 to 7.5 sq. ft./gal.) compared to conventional reactors (0.10-0.23 sq. ft./gal.). High heat input per sq. ft. improves reaction time. Their use as chemical reaction equipment is not advertised and is seldom considered. Some have and are used stealthily in the chemical synthesis for more than 60 years with excellent results ^{(4, 5, 6, 12)}. Generally they will be used in a back flow mix reactor ⁽¹⁵⁾ configuration. Most likely capital investment for electrically heated heat exchangers would lower compared to Dowtherm or hot oil based heaters.   

 

Such designs ^{(4, 5, 6)} are intellectual property of each company and need to be protected. Process designers will be challenged as at time information is not available from the vendors. They want to control their equipment use and that is tantamount to sharing proprietary information to improve their sales even when confidentiality agreements are signed. Lack of information form equipment and chemical supplier vendors has become an obstacle ⁽²¹⁾ and can interfere in “what if” analysis to select the optimum equipment for least solvent use. All factors, lack of equipment and physical properties information is and can be an interference in manufacturing technology innovation.  

 

Modular process designs ^{(4, 5, 6, 13)} can be very valuable alternate process design to current practices. They can reduce capital investment, improve profitability and add process flexibility to meet fluctuating product demands. It is possible that use of such configurations might be considered a cumbersome venture as the chemical/pharmaceutical industry is not tuned to out of the box thinking. However, we need to understand their value in reducing solvent use for every chemical synthesis process. They can be a competitive advantage and improve speed to market. 

 

Hedging on use of non-traditional equipment is an impediment to manufacturing technology innovation. All of the above are the low hanging fruits. All has to come from within each company as they know every process detail and nuance. Outsiders may be and that is big “may be” able to help but grassroot thinking has to be internal. 

 

Nondestructive Creativity Pathway:

 

Current established practice, from the laboratory to commercial scale where excess solvent per kilo is used is due to need to fit the process in an existing equipment, a case of fitting a square plug in a round hole ⁽²⁰⁾. To achieve “NET ZERO” every bit of “nondestructive creativity” and understanding of chemistry and chemical engineering by every chemical engineer and chemist will be needed and may have to be tested. They will have to think out of the box using suggested methods ^{(4, 5, 6, 7)} or any of their chosen methods. They have the creativity and imagination to excel. There will be initial apprehension but when conventional unit processes ⁽¹⁰⁾ and unit operations ⁽¹¹⁾ are applied they will see the benefits.  They could going forward become addicts. Applying out of the box ideas and concepts should not be any concern as they will be based on their education and training.

 

With all said and done underlying question would be “Is API manufacturing and fine/specialty chemicals ready to venture out to “NET ZERO”? Answer is “IT DEPNDS”. 

 

Yes there will be financial and business model implications as many of the APIs do not have sufficient product volume and can be produced on a campaign basis. Business models at companies might have to be reconfigured and there could be resistance. Upside will be significantly lower equipment idle time ⁽²²⁾ which has marred API manufacturing and can be attributed as a cause of high emissions. With alternate processes companies could respond quickly to any drug shortages. All of the above are the low hanging fruits. Again, all of the innovations have to come from within each company as they know every process detail and nuance. Outsiders may be able to help and that is big “may be”. Grassroot thinking, innovation, has to be internal.  

Since there is no mandate to achieve “Net Zero” for the existing products each company will have to justify their effort. There are financial implications for every business. They will think twice as hard to take their products to “Net Zero”. Significant amounts of monies ^{(23, 24)} are postulated to be spent from every business’s pocket with unknown return, unless there is a governmental mandate, likelihood of companies moving to solvent reduction per kilo of product i.e. REAL “Net Zero” for the existing products are extremely low. Companies could change their model as the suggested technologies and methods can lead to consolidation and higher profits. How much regulatory approval might be needed would have to be defined. Achieving “Net Zero” for the Brand and New Generics should not be a question. It is a must.  

Task at hand is not easy but if things were easy we would not have many of the technology innovations. Everything would have been done long time ago. Question going forward for us is “Are we willing and able to take up the challenge of reducing emissions?” We have a choice. Let’s make the right choice to achieve “Net Zero” in Active Pharmaceutical Ingredient & Fine/Specialty Chemical manufacturing. We owe it to the coming generations.  

Girish Malhotra, PE

 

President

 

EPCOT International

 

References:

 

1.     Net Zero: A Short history Accessed October 24, 2024

2.     Sheldon R.A. The E factor 25 years on: the rise of green chemistry and sustainability, Green Chemistry  Accessed February 17, 2021 

3.     Hubbard, G. Nondestructive Construction, TECH & INNOVATION Strategy+ Business, May 29, 2007 Accessed January 26, 2021.

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

5. 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
6. Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter April 2022
7. Malhotra, Girish: Profitability through Simplicity
8. Levenspiel, O. Chemical Reaction Engineering, John Wiley & Sons Inc, 1972, Second Edition, Accessed December 20, 2020
9. Malhotra, Girish: Sociochemicology May 30, 2013 Accessed January 13, 2023
10. Shreve, R. Norris: Unit Process In Chemical Processing, Ind. Eng. Chem., 1954, 46 (4), pp. 672–672
11. Unit Operation, https://en.wikipedia.org/wiki/Unit_operation,  Accessed July 11, 2017
12. Malhotra, Girish: Quick Review of Chemicals Related Process Development, Design and Scale up Considerations, Profitability through Simplicity, November 7, 2018
13. Process Technology
14. Wattco   
15. Malhotra, Girish: Capitalizing on Mutual Behavior and Chemical Reactivity of Chemicals, Profitability through Simplicity, May 29, 2023
16. Malhotra, Girish: Review of Continuous Process for Modafinil, Continuous Processing in the Chemical and Pharmaceutical Industry II, 2009 Annual Meeting, November 10, 2009,Nashville, TN
17. Malhotra, Girish: Analysis of API (Omeprazole): My perspective, Poster Session: Pharmaceutical Engineering, 2009 AIChE Annual Meeting, November 11, 2009, Nashville, TN
18. Malhotra, Girish: Art and Science of Chemical Process Development & Manufacturing Simplification, AIChE May 17, 2023
19. Malhotra, Girish: Considerations to Simplify Organic Molecule (API) Manufacturing Processes: My perspective, Profitability through Simplicity,  April 20, 2019.
20. Malhotra, Girish: Square Plug In A Round Hole: Does This Scenario Exist Pharmaceuticals?, Profitability through Simplicity, August 17, 2010
21. Malhotra, Girish: Information Challenges for Product, Process Development and Process Design: A Reality Check, Profitability through Simplicity, April 10, 2011 
22. Schrader, Ulf: Operations can launch the next blockbuster in pharma, McKinsey & Co.,  February 21, 2021 
23. What is Net Zero? McKinsey & Company , October 25, 2024  
24. Malhotra, Girish: ENVIRONMENTAL CONSERVATION (GREEN CHEMISTRY, NET ZERO, DECARBONIZING) IN ACTIVE PHARMACEUTICAL INGREDIENTS (APIS) & FINE/SPECIALTY CHEMICAL MANUFACTURING, Profitability through Simplicity, October 2, 2024

 

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

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

 

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

 

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

 

Following is a brief history of pharmaceuticals. 

 

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

 

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

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

 

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

 

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

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

 

Other factors have played part are:

 

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

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

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

4.     Assured profits. 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

 

For every organization there are two ways to innovate.

 

1.     Nondestructive Creation 

2.     Creative Destruction

 

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

 

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

 

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

 

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

 

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

 

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

 

1.     Pharmacy Benefit Managers (PBMs) and their partners

2.     Food and Drug Administration (FDA)

 

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

 

Pharmaceutical drug distribution model and Regulations:

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

 

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

 

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

 

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

 

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

 

Girish Malhotra, PE

 

EPCOT International 

 

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

2.     Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation, https://www.degruyter.com/document/doi/10.1515/9783110702842/html, Accessed June 20, 2022

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

4.     Shreve, R. Norris: Unit Process In Chemical Processing, Ind. Eng. Chem., 1954, 46 (4), pp. 672–672)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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