Capitalizing on Mutual Behavior and Chemical Reactivity of Chemicals

Fine/specialty chemicals and its family members such as additives, flavors and fragrances and active pharmaceutical ingredients have a commonality. They use similar/same chemicals and equipment for their synthesis for their production but are separated by end use and application. Their differentiation starts from how the same and/or different raw materials are reacted to produce the desired intermediates and products. They also have different quality standards and expectations. 

Solvent/water reduction per kilo of the product has always been a part of the process design but not emphasized. Discussion here centers around the opportunities chemists and chemical engineers have to reduce the solvent/water use and simplify processes. My discussion is based on actual experience of how by capitalizing and augmenting the reactivity and method of addition of chemicals, reactions can be optimized and can result in significant reduction of reaction facilitators (solvent/water). Discussion is not influenced by any regulatory, non-profit and for profit organization.  

Among the organic chemicals which includes petrochemicals, fine/specialty chemicals, active pharmaceutical ingredients (API) and their formulations have the highest emissions per kilo of product ⁽¹⁾. In recent years “Net Zero” ⁽²⁾  has become a mainstream topic. There is conversation but an effort on how we can reduce the solvent use for the production of APIs and their formulations, a subset of fine/specialty chemical product classification that cure diseases is least discussed. With emphasis on lowering emissions per kilo, process developers, when it comes to development have to act and react differently from what we are taught or practice. Solvent recovery and reuse is not enough or sufficient to get to “Net Zero”. Solvent use/reduction is critical for our planet. Creativity and imagination is needed. Volumes can be written on the subject. 

 

We are taught fundamentals of physical properties of the chemicals used and produced. How these can be used to reduce/minimize solvent use in various chemical synthesis are not taught in our universities and colleges. At least we were not taught. They are learnt and experienced on the job during development, scale-up, commercialization of the developed processes. During process development out of the box thinking is required. They are on the job training and developer’s EUREKA moments. Collective creativity ^{(3, 4, 5, 6)} helps to optimize processes and reduces solvent use. 

 

Some of the methods to optimize and reduce solvent use could be called magical tricks but they are not. They are pure and simple exploitation and manipulation of physical and chemical behavior. Physical properties of chemicals tell and teach us of their social behavior ⁽⁷⁾. It is up to us to decide how we can and are able to exploit them to create excellent processes. 

 

Diazotization is a chemical reaction that every chemist and chemical engineer is taught in Organic Chemistry and is used as an illustration. This reaction is about 100 years old and has been the building block of most Dyes in Germany ⁽⁸⁾ and worldwide. It is also used to produce many other products. Learnings of this and/or similar reactions can be incorporated and implemented to many other chemical reactions. Other examples are reviewed ^{(3, 4, 5, 6)}.  

 

In the illustrated reaction an amine is converted to its diazonium salt which is reacted further with appropriate molecule to create the desired intermediate/product. Focus here is on the diazonium salt production (Eq. 1). 

Aromatic Amine+ 2HCl + Sodium Nitrite  --->  Diazonium Salt + H₂O + NaCl     (1)

 

Diazo formation reaction is exothermic. To contain the exotherm, i.e. prevent any explosion or run away reaction, it recommendation has been to conduct it at low (0-5°C or lower) temperatures. In early process development reaction exotherm was generally controlled by adding ice to the reaction. This diluted the reaction mass. This was due to unavailability of jacketed reactors or heat exchangers. Reaction product, generally a dye, was filtered and filtrate disposed in river streams as it was the simplest thing to do ⁽³⁾. Impact of effluents on water, fauna and soil was not a consideration. These came later. Heat exchangers were tremendous help in that effort.

 

About seventy years ago Maumee Chemicals, Maumee Ohio developed a continuous ⁽⁹⁾ diazotization process for one of its products. This reaction was carried out at 35-40°C., quite an anomaly from the tradition of those and earlier days. This minimized the water/solvent use and improved the productivity of the process. Due to cost considerations hydrochloric acid was the acid of choice. Company commercialized many other chemistries that were novel for their time and were way ahead of even present day conservation considerations. 

 

Illustration of exploitation of mutual behavior of chemicals, reaction mechanism and kinetics is illustrated using Diazo reaction (Eq. 1). Amines are generally a basic chemical. To convert an amine to a diazo salt, it is reacted with an acid. Resulting product is subsequently is reacted with sodium nitrite to produce the respective diazonium salt. Equations 2 & 3 illustrate the reaction mechanism of the diazo reaction. It is acknowledged in most organic chemistry books ⁽¹⁰⁾. This sequence can be simulated in the laboratory and in pilot plant.

 

              RNH₂ + HCl       ⎯>                RNH₂.HCl                                (Eq. 2)  

 

RNH₂.HCl + NaNO₂ +HCl    ⎯>  RN₂Cl +2H₂O + NaCl              (Eq. 3)      

 

Amine reacts with hydrochloric acid to produce a hydrochloride (Eq. 2) with subsequent reaction with nitrous acid (generated by sodium nitrite and acid reaction) to produce a diazo compound (Eq. 3) that is reacted with a chemical to produce the desired product. This reaction sequences can be capitalized on in a plant by sequential feeding of raw materials, controlling the exotherm and reaction residence time.   

 

In the reaction step (Eq. 2), the formed hydrochloride is unstable. However, it is converted to produce the diazo product instantaneously as it comes in contact with nitrous acid. Yield of the diazo product is almost 100%. For conservation “Instantaneous reaction” is the key and is manageable. Addition sequence, capitalizing on heat of reaction and equipment scheme are the key for the success. Figure 1 is an illustration of the process. 

 

Theoretically one mole of hydrochloric acid is needed to convert the amine to its hydrochloride and an additional mole of acid is needed to react with sodium nitrite to produce nitrous acid which produces the diazo. As illustrated in Figure 1 by adding slightly excess than two moles of acid, excess of acid assures the hydrochloride formation, assures mixing and formation of nitrous acid to produce the desired diazo compound. Reaction is carried out in a circulating pipe with an inline heat exchanger of proper material of construction. Slight excess of sodium nitrite is needed. They are considerably less than the stoichiometry mentioned in many patents, too many to cite. 

 

Reaction exotherm is controlled by in-line cooling, place and way the chemicals are added to the reaction system and the residence time. 

Again, nature of chemicals, how they react and act is the key. Similar addition schemes can be used by the chemists and chemical engineers to create other excellent processes. They can produce active pharmaceutical ingredients, a subset of fine/specialty chemicals and many other organic products. Every chemist and chemical engineer who has mastered their chemistry and process development traits well will totally understand value of such addition methods and processes.

 

Chemicals share/tell their mutual behavior with us. We have the opportunity to take advantage of them. However, due to tradition we are afraid to step out of the PLAY box to be different. 

 

There are many other situations, where exploiting mutual behavior of chemicals especially as liquids, can be used to simplify organic syntheses. Reaction mass of most syntheses are liquid or a slurry. Liquid/solution are the preferred phase over slurries. Ways and methods to capitalize on social behavior of chemicals have been reviewed ^{(3, 4, 5, 6, 11,12,13, 14, 15, 16,17)} and in many other publications. Again, it is up to chemists and chemical engineers to be creative. Many might not believe but such processes based on capitalizing physical and mutual behavior of chemicals used and produced are possible. Unless they are explored, we would not know their value. They are economic and have the highest financial return, a basic premise of great business.

 

Girish Malhotra, PE

 

EPCOT International 

 

1.     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 Accessed February 17, 2021

2.     Burke, J. What does net zero mean? https://www.greenbiz.com/article/what-does-net-zero-mean, May 2, 2019 Accessed April 27, 2021

3.     Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter April 2022 Accessed May 24, 2023

4.     Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability, John Wiley & Sons, February 2011 Accessed May 24, 2022

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 Accessed May 24, 2022

6.     Malhotra, Girish: Research Report: Strategies for Improving Batch or Creating Continuous Active Pharmaceutical Ingredient (API) Manufacturing Processes, March 2017

7.     Malhotra, Girish: Sociochemicology May 30, 2013 Accessed January 13, 2023

8.     Diazonium Compound https://en.wikipedia.org/wiki/Diazonium_compound

9.     Continuous Process https://bit.ly/2Rp3Xlu

10.  L. F. Fieser & M. Fieser: Organic Chemistry, Third Edition, Reinhold Publishing Company 1956

11.  Malhotra, Girish: Improving APIs & Formulation: Are You Harnessing the Power of Liquids?  https://www.linkedin.com/pulse/improving-apis-formulation-you-harnessing-power-liquids-malhotra   April 23, 2023 Accessed May 24, 2023

12.  Malhotra, Girish: Focus on Physical Properties To Improve Processes: Chemical Engineering, Vol. 119 No. 4 April 2012, pgs. 63-66 Accessed May 24, 2023

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

14.  Malhotra, Girish: Art and Science of Chemical Process Development & Manufacturing Simplification, AIChE May 17, 2023 Accessed May 24, 2023

15.  Blog Profitability through Simplicity Accessed May 20, 2023

16.  Malhotra, Girish: Review of Continuous Process for Modafinil, Continuous Processing in the Chemical and Pharmaceutical Industry II, 2009 AIChE Annual Meeting, November 10, 2009, Accessed May 20, 2023

17.  Malhotra, Girish: Analysis of API (Omeprazole): My perspective, Poster Session: Pharmaceutical Engineering, 2009 AIChE Annual Meeting, November 11, 2009 Accessed May 20, 2023

Opportunities to Lower Drug Prices and Improve Affordability: From Creation (Manufacturing) to Consumption (Patient)

Since the beginning of 2018 “doing something” to curb ever increasing drug prices has picked up steam. I call two recent announcements ^1-4 to be “constructive destructionist” ⁵ and if successful could have an everlasting impact and game changing influence on the pharma landscape. With their success we should expect additional entrants. 

Till recently, many have talked and proposed legislations but whenever rubber has met the road the tires have gone, or go flat and the blame games started. We have to accept the fact that anything being proposed by the legislators or put on the ballot box is not going to come to fruition. This is due to pharma lobby having significant influence on the electability of the legislators who want to stay in office for eternity. This combination has been deadly against the needs of the constituents who want justifiable lower drug prices. 

Recent initiatives are opportunities worth a review. Each presents a game changing opportunity to improve drug affordability, improve product quality, revenue and profits for the pharma landscape. In the United States drugs are acquired through two major systems, Veteran’s Affairs is for the veterans and rest of the country through mutually subsidized healthcare systems and that includes Medicare. Veteran’s Affairs along with selected Health Systems ¹ (VAH) and Amazon, Berkshire Hathaway and JPMorgan ^2-4 (ABM) are set to cause a perturbation to the existing mutually subsidized system when it comes to their employees. They could be start of a revolution against ever increasing drug prices. I am presenting my perspective and opportunities they present.  

Veteran’s Affairs:

There are about seven million participants in the Veteran’s Affair (VA) system. Some of us may not know but VA has its own methods for acquiring drugs at discounted prices ⁶. Its drug acquisition plan is unique and most likely is not entertained by the pharmaceutical companies because number of drugs offered are restricted and pharma and supply chain profits are lowered. However, pharma companies have acquiesced to avoid wrath of the US government and the country. Following guidelines have to be followed.  

“Unlike Medicare, in which beneficiaries can choose drug plans, each with its own formulary, the VA offers no choice. Serving as the sole purchaser of drugs, the VA maintains a single national formulary that physicians must follow. The VA formulary is created through access restrictions on drugs. For drugs to be covered on the formulary, their makers must list all of their drugs on the Federal Supply Schedule (FSS) for federal purchasers at the price given to the most-favored nonfederal customer under comparable terms and conditions. Additionally, drug makers must offer the VA a price lower than a statutory federal price ceiling (FPC), which mandates a discount of at least 24 percent off the non-federal average manufacturer price (NFAMP), with a rebate if price increases exceed inflation.”

Even with VA’s restrictive purchasing program, February 2018 announcement¹ presents generic drug producers to capitalize on an opportunity to expand their markets (other Mutually Subsidized and Medicare systems) and increase profits and revenues. Since the healthcare systems are going to be directly working with the manufacturers, it is a unique opportunity for them to capitalize on values economies of scale and innovative manufacturing technologies ^{7, 8}.

Mutually Subsidized Systems:

VAH and ABM alliances ⁹ should use reverse calculations ¹⁰ to encourage manufacturing companies to innovate. Economies of scale and “what if” analysis can be used to improve manufacturing processes. Upside of the effort is going to be higher revenues, higher profits and lower drug costs. FDA and other regulators will have to be open  minded and proactive to make sure innovative manufacturing practices are adopted on a timely basis and commercialized ^{11, 12}.     

Figure 1 is a schematic of the supply chain that is applicable to patients in Medicare and mutually subsidized healthcare systems.  

Pharmacy benefit managers (PBM) ¹³, for simplicity I call them middlemen, facilitate distribution of drugs to most outside the VA system. Manufacturing and cost of API and their formulations are simple to understand ^{10, 14}. However, under the current system pricing from formulations to the patients becomes murky and complex. However, the mystery is being slowly unraveled ^15-19. States are also taking steps to contain rising prices ^{20, 21}.  

Figure 1

PBMs have made every attempt to make sure that the cost details are not readily available and the patients pay the highest drug prices. UnitedHealth ²² has announced a possible peak in the PBM “Black box”. However, till the beans of this initiative are counted and everything is black and white, it is too early to grasp the impact.      

It is interesting to note that PBMs block direct import of drugs by the patients from e.g. Canada and other countries but the same drugs are imported and sold at a significantly higher price in the United States. Explanation given is the safety of the drug. This also could be considered an artificial way to keep prices up by using scare tactics. Uniform global drug standards will greatly help but they would be a challenge to establish. 

From drug price information collected in India and in US ¹⁴ (with regular insurance, Medicare and NO insurance) one can easily see the reasons why PBMs have discouraged ABM Alliance ² to take a peak in the “Black Box”. Most can conjecture that PBMs do not want anyone to negotiate and jeopardize their profits. Sood etal ¹⁶ and Grant ¹⁷ have done an excellent review of the PBM price structure. Price multiples of between 100-1500 times from manufacturing to patients ^{14, 16}, Table 1, should be an eye opener for the negotiators in VA and ABM Alliance. As has been said earlier economies of scale and better technologies can significantly lower these multiples. 

Table 1

Drug Price Reduction Opportunities:

Using Panel B for the money flow¹⁶ illustration, it is interesting to note how a $18.00 drug gets to the patient in the current system and sells for $100.00. 

Using sound principles of economics, chemical engineering, chemistry, economies of scale and good manufacturing practices a 20% reduction in manufactured cost will translate to about $80.00 to the patient if no improvements are done to the current PBM supply chain “Black Box”. 20% or better cost reduction in the supply chain should not be considered an out of reach of possibilities. Combined cost reductions in manufacturing and supply chain would mean that a current $100.00 drug would cost about $65.00 to the patient. I am sure $35.00 cost reduction is worth the effort. 20% cost reductions in manufacturing and in the supply chain each are not out of the realm of reality. Effort would be needed. Everyone from “Creation (manufacturing) to Consumption (patient)” will benefit financially. 

Panel B is Courtesy Sood etal ¹⁶.  

Business Model Change:

Accelerated 2018 chatter is not going to let up. It seems that the pressure to make drugs affordable or lower drug prices will continuously increase. Dan Akerson, ex CEO General Motors, said it well that If you don’t attack your own business model, trust me, somebody else will. 

So far pharma companies and PBMs have stuck with their models of creating new drugs and along with PBMs selling them at the highest price participants can afford in mutually subsidized systems. Essentially no effort has been made to improve their methods to lower drug costs. In the last few years big pharma companies have relied on orphan drugs or marginally better drugs to improve their revenues and profits. These are not going to sustain major pharma companies for the long haul.

Since generic drugs, an ever-increasing need, in the United States are distributed through PBMs, in our mutually subsidized healthcare systems even they are priced highest level Table1. We have to recognize that Pharma/PBMs major customer base is dependent on affordable drugs. Pharma/PBM business model has to change. It is time.  

There is a need and it seems that PBMs and associated companies are trying to cater to the shareholders ²⁵ rather than the patients who are the basis of their existence. With success of VAH and ABM Alliance we could see spread of drug price reductions. Pace could accelerate. As they say “cat is out of the bag” and the question is how pharma industry and PBMs are going to participate for everyone’s benefit. My conjecture is outliers will cause a change and it will happen sooner than expected.  

Girish Malhotra, PE

EPCOT International 

1. Leading U.S. Health Systems Announce Plans to Develop a Not-for-Profit Generic Drug Company, www.businesswire.com, Accesses March 1, 2018
2. Triple Threat: Amazon, Berkshire, JPMorgan Rattle Health-Care Firms, The Wall Street Journal, January 30, 2018, Accessed January 31, 2018
3.  If Amazon And Buffett Lift Veil On Health Prices, Insurers Are In Trouble, Forbes.com, January 31, 2018, Accessed January 31, 2018
4. JPMorgan to Banking Clients: Joint Health-Care Venture Is No Threat, WSJ.COM, February 4, 2018, Accessed February 4, 2018
5.  Creative destruction: https://en.wikipedia.org/wiki/Creative destruction Accessed January 31, 2018
6.  D’Angelo, Greg: The VA Drug Pricing Model: What Senators Should Know, The Heritage Foundation, April 11, 2007, Accessed March 5, 2018 
7.  Malhotra, Girish:  Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011
8.  Malhotra, Girish: Innovation In Pharmaceuticals: What Would It Take & Who is Responsible?, Profitability through Simplicity, November 28, 2017, Accessed March 5, 2018
9.  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, Accessed February 27, 2018
10.  Malhotra, Girish: A Blueprint for Improved Pharma Competitiveness, Contract Pharma, September 8, 2014, Accessed February 28, 2018
11. 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, Accessed March 5, 2018
12.  Malhotra, Girish: ANDA (Abbreviated New Drug Application) / NDA (New Drug Applications) Filing Simplification: Road Maps are a Must. Profitability through Simplicity, May 11, 2017, Accessed March 5, 2018
13.  What Is a Pharmacy Benefit Manager (PBM) And How Does A PBM Impact The Pharmacy Benefits Ecosystem?, www.truveris.com, August 15, 2017, Accessed February 27, 2018
14. Malhotra, Girish: Comparison of Drugs Prices: US vs. India; Their Manufacturing Costs & Opportunities to Improve Affordability, Profitability through Simplicity, January 18, 2018
15.  Why Your Pharmacist Can’t Tell You That $20 Prescription Could cost Only $8, The New York Times, Accessed February 26, 2018
16.  Sood, N; Shih, T; Van Nuys, K; Goldman, D; The Flow of Money Through the Pharmaceutical Distribution System, June 14, 2017, http://healthpolicy.usc.edu/Flow_of_Money_Through_the_Pharmaceutical_Distribution_System.aspx, Accessed March 1, 2018
17.  Grant, Charley, Hidden Profits In the Prescription Drug Supply Chain, The Wall Street Journal, February 26, 2018, Accessed February 27, 2018
18.  Profits Are Hidden in the Prescription Drug Supply Chain, The Wall Street Journal, February 26, 2018, Accessed February 27, 2018
19. Grant, Charley, White House Eyes Role of Middlemen in Drug Price Fight, The Wall Street Journal, February 12, 2018, Accessed March 1, 2018
20.  On Drug Pricing, States Step In Where Washington Fails, The New York Times, February 27, 2018, Accessed February 27, 2018
21.  House Bill 4005, 79^Th Oregon Legislative Assembly -2018, Price and Cost of Prescription Drugs, February 26, 2018, Accessed March 5, 2018 
22. UnitedHealth Will Pass Drug Rebates Directly to Some Consumers, The Wall Street Journal, March 6, 2018, Accessed March 6, 2018 
23. Private conversation with Mr. Jack Harding Jr., Harding & Harding Associates, North Canton, OH March 1, 2018
24. Private communication with a Pharmacist at a leading pharmacy, February 26, 2018
25. Herper, Matthew: Cigna's $54 Billion Purchase Of Express Scripts Could Upend The Prescription Drug Market, Forbes.com, March 8, 2018, Accessed March 9, 2018

                        

Pharmaceutical Manufacturing Technology Innovation: Does Reading the Tea Leaves Matter?

For the last few years I have been presenting my perspective of where, how and why pharmaceutical industry as well as the regulators need to review where the collective is and could/should consider to make the drugs affordable to significantly large (may be 60%) population of the global population.

I often go back and review my experiences and perspective that I have presented over the years to see if we are making headway in technology innovation that could or would drugs more affordable.

Following are some of the old blogs.  

1. Process Centricity is the Key to Quality by Design Tuesday, April 6, 2010 https://pharmachemicalscoatings.blogspot.com/2010/04/process-centricity-is-key-to-quality-by.html
2. Why Fitting a Square Plug in a Round hole is Profitable for Pharma and Most Likely Will Stay? August 1, 2014  https://pharmachemicalscoatings.blogspot.com/2014/08/why-fitting-square-plug-in-round-hole.html
3. Are The Rules A Constraint to Innovation, Competition and A Cause of Adulterated Product? October 1, 2010  https://pharmachemicalscoatings.blogspot.com/2010/10/are-rules-constraint-to-innovation.html
4. Reading the Tea Leaves: Predictions for Pharma's Future Original January 14, 2014          https://pharmachemicalscoatings.blogspot.com/2016/01/reading-tea-leaves-predictions-for.html
5. Pharmaceutical Companies Can Innovate If They Want To, October 15, 2010  https://pharmachemicalscoatings.blogspot.com/2010/10/pharmaceutical-companies-can-innovate.html
6. Regulatory Compliance vs. Operational Excellence: What Should Happen First? February 3, 2015 https://pharmachemicalscoatings.blogspot.com/2015/02/regulatory-compliance-vs-operational.html 

It is interesting that in the last few years “continuous manufacturing” like acronyms QbD and PAT have become the latest buzzword in pharma. US FDA has introduced these terms to be adopted as if they will solve all the quality issues and as if the companies have designed operations using matchsticks. Companies have to address their issues rather than regulators suggesting what the companies need to do. Companies innovate manufacturing technologies and regulators don’t, they just regulate.

Reading the tealeaves is generally related to what the future holds. I consider it voodoo or an exotic past time. If we do not act on our needs/desires to achieve our goals, someone reading tealeaves for one’s future does not matter. What matters is self-actualization (1) at every company. Outside influences do not matter much if we do not internalize excellence. 

I have conjectured it my most recent blog “Innovation In Pharmaceuticals: What Would It Take & Who is Responsible?” that innovation has to be internalized and cannot be thrust by any external body especially the regulators. “Process Centricity” has to overtake the current “Regulation Centricity” in pharmaceuticals and that is the only way to achieve consistent product quality and make drugs affordable.

1. Self-actualization: https://en.wikipedia.org/wiki/Self-actualization, Accessed December 22, 2017

Girish Malhotra, PE

EPCOT International