Drug shortages: Causes and Cures

Lately we have been reading and hearing shortages of many drugs. As a matter of fact the US FDA on a routine basis publishes the list of drugs that are in short supply. Families and doctors of patients who need these drugs have a cause of concern. Hospitals, where some of  these drugs are needed, have become creative to determine what possible approved substitutes could be used. This can be a challenge. It would be worth reviewing the cause and cure of the shortages.

Before we begin to discuss the reasons for the shortages, I would like to clarify one point. We cannot and do not have any reason to blame any of the global regulatory bodies for these shortage. Regulations are minimal and might be a challenge who do not follow them and/or do not have equipment that is suited for the process. If the companies cannot follow these minimal standards then their being in the business should be a cause of concern.

Since drugs are manufactured, the shortages can be created by any or combination of the following. There can be other reasons also but I believe the following generally are the most important.

1. Raw materials
2. Process equipment
3. Product quality
4. Manpower

The above individually and or collectively can and will cause product shortages in any business where products are manufactured and/or are assembled. The reasons outlined above are not new. Every business and engineering curriculum, where manufacturing processes are discussed, review the effect and cause of the above four.

Since pharmaceuticals are highly regulated to protect patients, regulatory bodied particularly the US FDA proposed good manufacturing practices "cGMP". They have become the global benchmark. Some may consider them to be difficult to incorporate in their manufacturing routine but they are minimalist. Science and engineering curriculum teach us methods that if applied properly will exceed the "cGMP" guidelines and will cost less than any one can imagine. We just have to do the right things in the first pass. We all know that second or additional passes to achieve quality will cost additional money and there are no assurances that each subsequent pass will produce quality product.

Some of the steps to avoid shortages are well known. Occasional review helps.

Raw materials:

To ensure raw material supply, developers have to qualify more than one supplier who can supply materials on a timely and as needed basis. In addition, the process developers have to make sure that the materials from each alternate supplier can be converted to quality product. Such an exercise can minimize availability and scheduling issues.

Process Equipment:

If the equipment used to produce a product is not designed for the process, product quality issues will come up.

Another cause of delays can be equipment availability. We need to recognize that due to low dosage, API/formulated drug volume per batch per plant are generally low compared to the volume of fine/specialty chemical products. Since the API/drugs due to their toxicity cure a disease, it is necessary that the equipment be very clean to prevent cross contamination. This, due to low production volume, can result in equipment availability and scheduling challenges individually and/or collectively. All these can lead to product shortages. There are ways to eliminate these situations and requires a revamp of manufacturing and business strategies.

Product Quality:

Product quality is dependent on process robustness. However, in pharmaceutical manufacturing especially in the manufacture of API, due to low dosage resulting in significantly low volume of API per batch per plant economies of scale i.e. the best processes are not possible unless an effort is made to have designated equipment for the product. With the current methodologies and manufacturing set up engrained in our thinking the problems of shortages will persist. This can only be eliminated if we overhaul of the process development and manufacturing strategies. However, due to high profitability such a shift might not be in the offing.

Manufacturing technologies used in the pharmaceutical manufacturing are borrowed from the chemical industry. Chemical industry believes in process of continuous improvement, lean manufacturing, six-sigma and quality first through competitive innovation. Pharma has not done so and needs to do that. There is significant discussion and all seems to be focused at formulation of drugs. Many might not agree but API manufacturing, heart of every drug, is generally not considered part of the pharmaceutical manufacturing. This adds to the problem.

Manpower:

Why and how manpower enters into the quadratic shortage equation as it should not? Reason it does is due to very infrequent runs of the same product. Since many different products are produced using the same equipment, there is constant juggling of materials and methods. All this can lead to errors i.e. potential product shortages. Constant manpower training can add to manufacturing delays and lack of it can cause “off-quality” product resulting in shortages.

Companies need to consider and invent methods that will eliminate shortages. This could be higher production volume per run or better technologies so that different products can be produced in the same equipment. Re-training of manpower if needed would be more organized.

One solution can not fit every product or company. Each company has to review its situation and has to take steps to minimize shortages. They can be minimized if we want to.  

Girish Malhotra, PE

EPCOT International 

Generics Fees: A Fantastic Opportunity

US FDA has created a fantastic opportunity for incorporation of the best manufacturing technologies in the pharmaceutical hemisphere by charging fee for every generic company globally. The carrot of early approval if that happens will drive to have the best processes for API & formulation if the companies want to produce repeatable quality and safe drugs. Early approvals also will mean quicker profits compared to the current status. It would be a win-win.

Early approval will require that the processes meet the regulatory requirements on the first pass. QbD will have to be the mantra. This can happen only when the filing company has command of the process through best of the manufacturing technologies. It would be in companies’ interest to implement technologies to recover cost of fees. Having the best of the technologies will also mean the companies that cannot meet the regulatory standards after paying fees will have to review their long-term business strategies. Best will survive. Long-term this could result in consolidation. Lower costs could be in the horizon also.

Consolidation would have additional benefits of capitalizing on economies of scale i.e. better manufacturing technologies and processes will be the driver for the companies to stay in business. Better quality drugs will mean that many of the TLA’s (three letter acronyms) that are prevalent in pharma will fit in the puzzle and might not be needed. QbD and PAT will become way of life rather than perceived voodoo science as many think. Before the fact rather than after the fact will force competition.

I firmly believe adoption of fees will be the best happening for the generic pharmaceutical companies. Companies who believe in technology will survive. Congratulations and thank you to all individuals who have been involved in driving this discussion.

Girish Malhotra, PE

EPCOT International

Pharmaceutical Quality: Is it a Company or Regulatory Responsibility?

A recent report ⁽¹⁾ by a committee of Board of Directors essentially gives Johnson & Johnson a clean bill of health for the following incidents at McNeil OTC. I have not reviewed other issues discussed in the report.

·       Motrin dissolution

·       B. Cepacia issue

·       Musty odor

·       “Super potent” Tylenol

Fortunately no one died but what makes the report interesting is how it lays the partial blame on FDA for some of its guidelines, exonerates J&J from its quality lapses on self-induced manpower shortages and does not discuss company’s inaptitude which is obvious to anyone who is experienced with manufacturing operations.

Whatever the reasons of the problems, problems were created at the company and not by the regulatory agencies. Johnson & Johnson is globally known for quality. It seems attaining profits and bonus targets took precedence over product quality.

My conjecture is that for the Motrin and Cepacia problems are raw material issues. If J&J's suppliers did not supply material to spec or supplied contaminated materials they should be held accountable and responsible. Other question that could be asked to J&J is that were proper raw material specifications in place.

Strangely the “musty odor” is still around J&J and I wonder who is being held accountable for it. May be “Mr. Product Recall” should be called to the rescue or whitewash.

Since details of dissolution issue are not elaborated, one can conjecture that the dissolution problems happened due to material that was used, was different from the specified material. Thorough analysis of off-spec material would have identified the problem and it should have been part of the report. Why this is omitted is an interesting question?

Cepacia problem occurred due to contaminated raw material from the supplier. This suggests that either the specifications were not tight or some error happened. It should have been caught at the supplier’s lab or J&J lab during quality check before the product got used. FDA guidelines suggest that the companies check their incoming raw materials. I guess the company did not follow the regulatory guidelines.

Production of “super potent” Tylenol is not only a failure of “good manufacturing practices (poor scale-up)” but also a failure of “good accounting/business practices” especially as it happened over a period of time. During the five-month period J&J produced 10 batches. Error of overcharge (between 11-24% over specifications) should have been caught as soon as they happened through material and cost variances, a standard practice of inventory and cost management controls. Since they were not caught immediately is suggestive of McNeil had issues with their operation and management systems. Since it took about five months, if it is true, to find out over charges it is suggestive that the whole Tylenol profit center needs a thorough scrutiny. It makes one wonder how many other things are being hid under the carpet?

The following excerpt from the report needlessly points J&J’s problems to FDA regulations. It should not have been included as it basically suggests that US FDA’s cGMP guidelines are vague. It is like making FDA partially responsible for whatever happened at J&J. Similar implication could be extended to other global regulatory bodies.

US FDA or any other regulatory body should not be blamed for J&J’s inaptitude. These regulatory bodies are not in the business of designing processes and methods for companies’ products and processes. It is the responsibility of the companies to ensure they have processes and methods that deliver quality products based on good science and engineering principles.

The FDA is responsible for enforcement of the FD&C Act, and has promulgated regulations that require drug product manufacturers to employ “systems that assure proper design, monitoring, and control of manufacturing processes and facilities.” The FDA’s cGMP regulations are intended to “assure the identity, strength, quality, and purity of drug products by requiring that manufacturers of medications adequately control manufacturing operations. This includes strong quality management systems, obtaining appropriate quality raw materials, establishing robust operating procedures, detecting and investigating product quality deviations, and maintaining reliable testing laboratories.” The FDA does not differentiate between the manufacture of OTC medications and prescription medications, treating both as drugs subject to the same cGMP requirements.

The FD&C Act and the FDA regulations are sparse on the specifics of what constitutes cGMP. The FD&C Act states only that manufacturers of drug products must employ cGMP. The FDA’s implementing regulations, in turn, are only marginally more specific -- requiring, for example, that laboratory facilities be “adequate,” that manufacturing facilities be “of suitable size, construction and location,” and that certain equipment be used “when appropriate.” The FDA asserts that this level of generality provides a flexible approach “to allow each manufacturer to decide individually how to best implement the necessary controls . . . .”

Report citing “sparse on specifics” is really questioning the intelligence of every chemist and chemical engineer. Experienced chemists and chemical engineers while working at regulatory bodies have suggested cGMP guidelines that will allow the processes to produce quality products. Process developers at companies have to understand the intent of the regulations and develop and commercialize processes that will deliver quality product. If the feedback to the report writers is that the regulations are vague even then it is the responsibility of the company to use processes that produce quality products.

Regulatory bodies are not in the business of suggesting how each process should be designed and operated. It is the responsibility of the personnel at each company to ensure that the produced drugs meet established quality standards. If the members of Board of Directors of a company are suggesting that the regulatory bodies should design and specify equipment, operations and methods then the report writers do not understand the intent of CFR 21 Parts 210 & 211. Is it not the responsibility of the every company (public, private or government held) to ensure that their products are safe for their customers?

In this report J&J’s independent board members (many question their independence) are suggesting that lack of manpower caused the problem. It is management’s responsibility to make sure that they are staffed properly and the company delivers quality products to its customers. If the management is not responsible then the Board of Directors should be held responsible and accountable for company's actions or they should make sure that the right people are managing the company. Reoccurrence of odor issue is suggestive of that company has not learnt from past experiences.   

Lately reoccurring drug quality problems have become part of our life. This is because companies are using the least technologically advanced and economic manufacturing methods to produce their products. Having fancy equipment does not guarantee quality product.

To ensure product quality pharmaceutical companies are relying on repeated quality by analysis (QbA) using technologically advanced analytical methods. Even with such technological sophistication they have had issues that have resulted in product recalls. We are all familiar with Baxter’s Heparin issue. Chinese raw material suppliers had adulterated their product with an inert.

Not understanding and/or having the right process should be a cause of concern. Analytical methods will only tell the after the fact problem. These instruments do not fix problems. Unless companies have command on their process and its raw materials the problems will persist. Regulatory bodies should not be blamed.

When the reason of quality problem is being passed on or an excuse is given and no one gets prosecuted, it might be time to change the laws. Tiered heavy fines could be levied. These fines could be at different points of the distribution chain with the heaviest being if the product gets to the pharmacy shelf. Penalties could include monetary fines along with prosecution of progressive levels of management.

The report mentions lack of attention by certain non-quality control workers such as  “engineering and operations”. With such implication one would expect detailed investigation. Why did the board not explore this area and detail this lack of attention. It is fascinating that the word “engineering” has been mentioned only ONCE in the whole report but they are blamed. If it was operations that did not pay attention, it is suggestive that proper procedures were not put in place by the company management.

All of the above suggests that J&J has significant opportunities with their total business systems. Above issues may be just the tip of the iceberg. J&J is relying on post analysis (QbA) methods to produce quality products. A complete audit of their manufacturing processes and methods will unearth many issues that can save J&J significant monies. QbD (Quality by Design) methods could be implemented in many cases thereby assuring high quality and improving profitability. This is necessary and should be done if J&J wants to prevent future embarrassment.

I wonder how James Collins would feel today about J&J if he had to re-write his “Good to Great” book. Would J&J be part of the book?

Girish Malhotra, PE 
EPCOT International



(1) http://freepdfhosting.com/bc85fe20b1.pdf

Drug Prices: Food vs. Medicine - A Difficult Choice for Some

In my recent trip to India, during my discussion with physicians about the various drugs that are used for HIV and tuberculosis, I was informed that many times patients (lower and mid economic strata) do not complete their medication course in spite of the low drug prices. This is due to family has to make a choice between food for the family and medicines for an individual. I had to explore.

I was able to get the average prices of some of the drugs in India. Comparing the price of the same drugs in US was a shock. Yes compared to India the prices of the selected drugs are higher by multiples of 2 or 3 or more.

All this begs a question why we have multiple magnitude differences when many of the active ingredients are coming from India and China. There has to be a rationale for the drug pricing in different countries. My conjecture is that the drugs are priced based on local country economics rather than on competition. Since humans want to extend their life, the drug prices are set at their highest level the customer can afford. Even with the prices being set at levels so that the customers can afford the drugs to treat their illness, many at times have to make choice between drugs and food needs. Such situations exist across the world. A question needs to be asked and it is: how and what can be done to make drugs more affordable while the companies retain their profits.

Based on economic principles competition drives to lower prices and best of the technologies drive to retain profits. However, it seems that the drivers that work in every business do not work in pharmaceuticals. Best of the manufacturing technology is not needed to deliver profits. Pricing delivers profits.

Since I have not seen many articles published about setting drug prices, one would assume that there is minimal to no discussion in the public domain. Arguments have been put for prices being high due to monies needed for new product development and need to meet different regulatory and pharmacopeia standards. If so the prices should equalize across the board in every country but that is not the case.

There are ways to lower costs. If we have one global pharmacopeia standard instead of multiple standards, as we currently have, better manufacturing technologies through higher production volume will bring the production costs down. Global politics, disagreements and having controls of standards have prevented a single global standard.

Other factors that have prevented lower drug prices are lack of “economies of scale” and less than optimum technologies to manufacture the active pharmaceutical ingredients and their formulations. This is due to low volume of products being made at many sites. Some would disagree with my hypothesis but we all know as the production volume per site increases, manufacturing technologies improve and costs come down.  

Since the pharmaceutical dosage is in milligrams, the total volume of the active pharmaceutical ingredient needed to serve customer needs is low. Volume per site is further reduced when many different companies manufacture the API. Depending on the selling price, a billion dollar drug sale per year administered at 0.5 milligram level can have total API demand of less than 2,000 pounds per year. If this API is manufactured at multiple sites, economies of scale will not exist. Most likely the manufacturing process will be inefficient and asset utilization will be less than desirable. Due to these factors regulatory compliance needs pose additional challenges. Improving on these is not part of the pharmaceutical business model as the companies are able to pass inefficiency costs to the customer and are able to satisfy their stakeholders by meeting their profit objectives.

Some might argue that my views do not hold water. I would illustrate my point using a fluoroquinolone, (Levofloxacin), an antiretroviral (Tenofovir) and Isoniazid used for tuberculosis.

Levofloxacin is used to treat a number of infections including: respiratory tract infections, tuberculosis, cellulitis, urinary tract infections, prostatitis, anthrax, endocarditis, meningitis, pelvic inflammatory disease, and traveler's diarrhea ⁽¹⁾.

Levofloxacin (750 mg) tablet can be purchased in India for about Rs. 10 per tablet (about $0.22 at Rs. 45 per dollar exchange rate) whereas the average wholesale price for the same dose tablet in US can range between $22-24.00 per tablet. At a local drug store an uninsured person would pay about $1343.00 for 30 tablets i.e. about $45.00 per tablet.

There are about 20 companies (12 are in India) on the Drug Master File that can manufacture levofloxacin. If the global sales were about $ 2.0 billion per year, the total API demand would be less than 200,000 pounds per year. If all of the 20 companies were manufacturing the API, there is a minimum possibility of taking advantage of economies of scale. Processes will be inefficient at best.

If the selling price of the levofloxacin API were about $100.00 per kilo then at 80% formulation efficiency the cost of API in each 750 milligram tablet would be about 9.5 cents. If the factory cost of the formulated and packaged shelf ready tablet were to be another 9.5 cents per tablet, the factory cost of the formulator would be about $0.19 cents per tablet. Considering the sale price of about 22 cents per tablet in India suggests that my API price assumption is high. It also suggests that huge profits are being made in the by the companies who are producing and selling Levaquin in US, the brand name for Levofloxacin.

Another fluoroquinolone API meeting US Pharmacopeia standards is sold at about $50.00 per kilo. Same API meeting Indian pharmacopeia is sold at about $30.00 per kilo. This suggests that we need a global pharmacopeia standard to remove price differential and gain on economies of scale.

In a recent paper the process yield of Tenofovir, a HIV drug, was increased to 24% from about 13%. This is significant improvement but the yield is still low. With this yield costs associated with waste treatment and process inefficiency are being passed to consumers. If Tenofovir were a specialty chemical, at the 24% yield, it would never be a commercial product. However, since it is a profitable drug, costs become irrelevant. Prices have come down by four folds ⁽²⁾. Clinton and Gates Foundations have helped to lower costs and distribute these drugs. If the yield could be improved from 24% to 65% or more and can capitalize on economies of scale and the costs would reduce drastically. However, there is no interest in reducing costs further as making drugs more affordable could possibly eliminate foundation funding.   

In India Isoniazid 300 mg tablet (for tuberculosis) wholesales for about 2.0 cents per tablet. Same drug in US wholesales for about 7.6 cents per tablet. Even at the low price many in India have to choose between food and medicine.

To retain profits companies are raising prices. Governments are slowly moving towards new drug and price controls ⁽³⁾. If this were to happen across the board, companies would be forced to change their business model. Since generics have come to play also, the new landscape will be interesting. 

Everyone would agree that competition improves quality and lowers costs. I wonder would a “subsidy-less” world bring real competition and innovation to the pharmaceutical world. Would the drug prices be lowered? I fully recognize that the healthcare programs are necessary for the masses but does that mean we have to live in the topsy-turvy world of drug price differentials and the drug prices could stay at their highest levels.

We have to recognize that the health insurance programs subsidize medicine prices for the consumers. Thus in the countries that have such programs an average consumer does not know or understand much about price of medicines. Even the physicians do not know the sale price of the medicines they prescribe. If there were no insurance programs, we all will have to pay for the medicines from our pockets. This could force many to choose between food and medicines. Should we accept the scenario of having to choose between food for the whole family and medicine for an individual? If this were to happen it would be a challenge and the ensuing debate would be of a kind that we have never imagined.

Girish Malhotra, PE

EPCOT International

  

1.  http://www.drugs.com/monograph/levofloxacin.htm
2.  http://utw.msfaccess.org/drugs/tenofovir-disoproxil-fumarate
3. http://www.businessweek.com/magazine/content/11_24/b4232025180703.htm

Information Challenges for Product, Process Development and Process Design: A Reality Check

Recently in my efforts to assist a client to find suppliers of certain product, I took the easy route i.e. search using one of the search engines. The results were very interesting. Most of the product/s were available from Chinese and/or Indian companies. All of the sites had minimal to no information on any physical properties or performance data. So asking them for information would have been a waste of time, as they have none.

Since I knew the application and potential products, and I have been following various mergers, my search by companies was an easier route. To my chagrin, I experienced the following: At the majority of websites if one clicked on “Contact Us” more than 75% of the time you get a form that you have to fill in [practically give your life away] and wait till the time whenever you get a response. For multinationals one has to dig deeper to get to your country and hope there is contact telephone number so you can get a customer service telephone number. You might be lucky if you get the headquarters phone number on their website. Your project is on the path for a delayed schedule.

Since not many customer service numbers are available, you can call the main office and hope you will be able to talk with a live person who will give you a customer service number. You have to go through a debriefing before you get a number. Once you get the number then there is a 50% chance that you will have to leave a voice mail message and leave your number and hope you will get a call. This could be an unknown time. Your project got further delayed.

If you are lucky and are able talk with a live customer service person, they want to have detailed information about you [e.g. e-mail, phone number, state besides your and company name] before they can tell you whether they have a product that could come close to your needs. It seems they are more interested in filling a form indicating they talked with a person rather than exploring what a potential customer needs. They also want to know the annual quantity when I do not know whether their product will work for my application. Since we are dealing with chemicals, they want to know how the product would be used. They even have the audacity to ask the details of your product development. If you tell them it is under development and confidential your chances of success reduce dramatically. One has to make up some application scenario to go past the customer service person to talk with the right technical person. Since a chemical could be common for different applications, you can be bounced around. You may still end up leaving a voice mail message. If one does not answer the questions correctly there is a good possibility that information might not be provided.

Yes everyone is busy and we do not have time. Are we too busy nursing our blackberries and e-mails that we do not have time to talk with the potential customer who puts food on our table? The question becomes how can the companies facilitate information availability to chemists and chemical engineers so that they can develop an efficient, economical and sustainable process or product? ICIS (OPD) and Chemical Week directories used to be an excellent source of information but not anymore. Their size has shrunk. Many producer companies have disappeared. I contacted some companies from the list for the products I needed. Many did not respond and other had the product category listed but no actual products. On one hand we want people to be productive but on the other hand create many road bumps for them to complete a project on time.

I can almost bet none of “C, MD, E, V or G” levels at any chemical companies have toyed with their website as a customer and found the challenges customers [existing and potential] have to face to get meaningful information. I am sorry to say most of the companies in the developed countries fall in this category. Companies in the developing countries will give you MSDS that has been copied and has minimal information. By having minimal information they might be fulfilling a regulatory obligation. I wonder if regulatory overseers have ever looked at them to see if they comply.

What are the downside consequences of ones inability to get the information on a timely basis?

1.     Delayed project.

2.     Disgruntled customer who has wasted her/his productive time.

3.     Since the information is not readily/easily available, there is an excellent possibility that the developed product would not work and has to be redone or the process is inefficient, uneconomical and unsustainable or extra effort is needed after the fact to optimize what was to be an excellent product or process. Unfortunately for active pharmaceutical ingredients and their formulations once the process is “blessed” there are no second chances.

4.     My conjecture is that the lack of information is the leading cause of not having “Quality by Design” processes for the manufacture of pharmaceuticals.  

I asked my colleagues/clients in the business do they encounter similar challenges. Each one of them chimed in and shared their sad stories. Less than 25% had good experiences. They rely on their network and on the sales person knocking on their door to share virtues of their offerings.

In the good old days - it seems like a zillion years ago - companies had brochures that were helpful and we had them stashed for reference. By the way they were an excellent source of physical property information. We all know physical and chemical structures do not change with age. Personal libraries were shared. At mega companies there were data books.

As chemical companies went through reconfiguration, the data availability started to become scarce. Internet brought the hope that it will reduce personal data banks and could easily access the information to design efficient, economic and sustainable process. Unfortunately that did not happen. It has become harder and a challenge to get minimal information. Material safety data sheets (MSDS) are provided as a substitute of technical data sheet. They do not even come close. Many at the companies agree that their websites are difficult to navigate and leave lot to be desired. I wonder why they do not ring the bell up the chain. 

If you want real product information, one has to register and almost sign their life away except for their family jewels and hope they will remember the password for future use. All this is dependent on one receiving a confirmation mail that one has to click to be part of the database. There is 50% chance one might not get lucky in these areas. I am sure there is some rationale reason for this personal information but I can bet none of this information is reviewed let alone used to follow up potential customer satisfaction. I also wonder how this information is being mined. Is it being abused? If you are able to log in and download the information there is no guarantee that necessary technical data including physical properties would be available.  

The bottom line: The above discussion is not complaining or a recitation of actual experiences but an identification of an opening and excellent opportunity for the companies to look at filling their half empty glass. It is very possible that in today’s unsecure world “legal beagles” might advise against easy sharing of information but every crook will find the information one way or the other. By building road bumps and road blocks companies are ever lowering productivity of their own employees and their customers where information is needed to design a product and/or process.

How can one proceed to make their company’s information more accessible to potential customers? First, the problem has to be recognized by “C, MD, E, V or G” levels in a company. Let them go incognito on their own website or a search engine to see what the reality of life looks like. It seems that in the name of protecting intellectual property we have lowered our productivity and creative thinking. They might also find out the navigational challenges their website creates. Maybe they might lead us to the rainbow? In addition, website are designed by designers to look pretty. They are but I wonder how much input they have from the actual users. A point to cogitate!

Girish Malhotra, PE

EPCOT International

P&G and Teva is a win-win and herculean challenge for many.

Last Week P&G and Teva Pharmaceuticals started a relationship. This is new frontier that will be a challenge.

I have posted my views at the link http://www.glgroup.com/News/PG-and-Teva-is-a-win-win-and-herculean-challenge-for-many.-53164.html

It will be interesting to see how the playing field changes.

Girish Malhotra

Are patents a double-edged sword? Perspective Matters.

Patents are filed to preserve intellectual property for the duration of the patent life. This is the fundamental right of every inventor as they protect their invention from competitors and gives them competitive advantage. Pharmaceuticals have relied on this right to preserve their inventions. These patents are a treasure trove for the competitors and folks who want to violate someone else’s intellectual property.

Fine/specialty chemicals and coatings are generally commodity products and relative to pharmaceuticals do not face many contentious patent battles. However, due to high profit margins, the patent game is very different for the pharmaceuticals.

Tradition has been that when filing patent for a new chemical molecule generally extensive information about different synthesis paths that have been explored and could be used to manufacture the new molecule are included in the patent. The intent is to block competitors from making the same chemical by the routes that have been used and suggested in the patent. Information disclosed in the patents is of significant benefit to the competitors and/or other inventors to create processes that are better than the ones created by the original inventor/s.

With the changing economic global landscape the World Trade Organization (WTO) membership has grown. Suddenly the global creative pool has expanded multifold. Creative minds in the developing countries have started to exploit the knowledge in the public domain. Internet has been a boon to their creativity and imagination. They are able to reduce their process development time as they judiciously use the knowledge that is easily available. They are also able to develop and create processes and chemistries that are simpler and cheaper than the original invention. Ten years ago all this was unthinkable.

Generics as well as brand companies are using different strategies to capitalize on such fetes. Knowledge is being effectively used to challenge pharmaceutical patents following Hatch-Waxman Para IV provisions. Patents from competitors are being used to prevent cost reduction of existing products. Generics have enjoyed significant benefits through “pay for delay” and other collaborations. It is well known that “pay for delay” is being used to delay generic entry i.e. lower costs for the consumer. I call the patents and contained information a double edged sword.

As the global pharmaceutical playing field changes, businesses have to address a question. Any company that has invented a new molecule to cure a disease will file a patent. It has to give a method of synthesis but does it have to give its alternate routes from literature. By giving minimum information it would make the literature search for others a challenge. Inventor company would have developed proprietary manufacturing process/s. They are company’s confidential information and can be protected through proper documentation. Point is why make things easy for competitors in this competitive world. I have relied on such confidentiality and been able to protect the synthesis methods and associated technologies.

Patent attorney’s would defend what has been the tradition. Business people have to decide what should be path forward while considering the advice of their patent counsel. My conjecture is that least shared is most protected and could prevent patent invalidation/challenges based on synthesis routes. Any strategy that challenges competitors is an advantage for me. Anyone can chime in with their opinion.

Girish Malhotra, PE
EPCOT International

Pharmaceutical Companies Can Innovate If They Want To

Pharmaceutical companies including API (active pharmaceutical ingredient) manufacturers have an uphill battle to achieve manufacturing perfection that will deliver quality product without regulatory oversight. I believe that the industry has created this regulatory juggernaut due to its inability to produce consistent and repeatable quality products.

Recent case of Johnson and Johnson was a failure of manufacturing and financial controls that are the fundamentals of good business. There are other similar incidents where the products were contaminated. Due to such repeated occurrences, regulatory noose gets tighter. Since industry created the juggernaut, it can and has the ability to loosen the noose provided it “rights” its practices.

Since the drugs are for human consumption, the manufacturers have to be reined in to assure quality. This has led to the establishment of “do and don’t” guidelines i.e. analysis paralysis. Industry besides inventing new molecules is more focused on how to meet and comply with the guidelines and regulations rather than developing and commercializing processes that are based on “best of the best” physical and social sciences (chemistry, physics and economics) i.e. chemical engineering.

Brand companies have lived with speed to market. Since they can make their financial margins and generics will take over the business, their thinking has been to invent new molecules and not to invest in new and better manufacturing technologies for the products that are short lived in their stable.

There are other factors that inhibit pharmaceutical companies to have the “best of the best” manufacturing processes for the manufacture of drugs. They are:

1. Drug pricing is based on the highest price customer will pay. Since companies can achieve their financial goals, there is no economic incentive to improve manufacturing technologies.

2. Due to drug dosage, annual volume of the drug per plant per year can be very low.

3. Companies have relied on fitting the process in the existing equipment. This has not resulted in having an optimum process for the products and can result in variable product quality. This is one of the causes that have lead pharmaceutical companies to the current state.

4. Ability to pass on the costs associated with inefficient processes to the customers.

5. Lack of competition during the patent period and also after the patent expiration. Later is due to the regulatory and other economic challenges companies have go through to commercialize drugs. Unless the volume is very large few venture the field.

6. Ability of the companies to recall any “off-spec” products from the market without much retribution.

All of the above collectively and individually can be overcome if the companies create excellent processes based on good physical sciences for the “new products only”. If done right they will improve the total business process such as inventory turns, minimize in-process testing and accumulation of intermediates.

Regulatory and financial investment is a deterrent to manufacturing technology innovation for the existing products. However, Generics can innovate manufacturing technologies for existing products as well as the products that are transitioning out of patent i.e. new generic products. They have incentive as they are there for the long haul.

There are possibilities and opportunities. We have to look at them individually and collectively. Some of them are listed as follows.

1. Improving raw material inventory turns by ensuring raw materials do not have to be tested and can be used “just in time”. There are ways this can be accomplished.

2. Improving and/or eliminating intermediate isolation and storage by completely eliminating in-process sampling and testing i.e. the process will have to be perfect and repeatable at every step.

3. Use of high-powered analytical instrumentation during development of API and drug formulation is necessary. However, we need to develop tests that are simple to give us the necessary answers in the shortest time. We do not need a rocket launch procedure when we can walk ten feet or need to use a Lamborghini when a bicycle would suffice.

Many of the puritans might not agree with my simplifications and perspective. Unless we try to simplify and take command of the processes and produce repeated quality product, regulations will prevent us from manufacturing innovation and simplification. Many of us may remember the jingle “Try it, You'll Like It”.

A systematic and well-orchestrated methodology can be developed and incorporated for pharmaceutical manufacturing. All of the elements exist. If done properly we can move from regulation-based manufacturing to science based and driven manufacturing. Science based technologies will produce consistent and repeatable quality product that will become the norm rather than the exception. Total business process (inventory turns, cash flow and capital investment) will improve and be simplified. In addition, processes will be economic and sustainable.

Girish Malhotra, PE
EPCOT International

Related Articles:

1. Malhotra, Girish: The Path Towards Continuous Processing, Pharmaceutical Processing
2. Malhotra, Girish: Process Centricity is the Key to Quality by Design, Profitability through Simplicity April 6, 2010
3. Malhotra, Girish: Pharmaceutical Costs, Technology Innovation, Opportunities and Reality, Pharmaceutical Processing, February 2010 pgs 20-24
4. Malhotra, Girish: Alphabet Shuffle: Moving From QbA to QbD - An Example of Continuous Processing, Pharmaceutical Processing, February 2009 pg 12-13
5. Will Chemical Engineers Save Pharma? Pharmamanufacturing.com April 10, 2009
6. Malhotra, Girish: API Manufacturing: A Road Map for Green Chemistry and Processes; pharmaQbD.com October 14, 2008
7. Malhotra, Girish; API Manufacture-Simplification and PAT; Pharmaceutical Processing, November 2005, Pages 24-27

Are The Rules A Constraint to Innovation, Competition and A Cause of Adulterated Product?

Rules are generally created to be followed. They maintain discipline. To innovate many times they are broken intentionally or unintentionally. Such forays lead to the creation of new rules. However, if the rules to be followed are cumbersome or become cumbersome, they can be a deterrent to innovation and competition. Companies need to maintain profitability while following complex rules that are difficult to comply with could ship marginally unacceptable product to the market. Such a practice would be violation of the public trust.

A review of the proposed US FDA guidelines for “Process Validation: General Principles and Practices” suggest that the rules are complex. They instead of simplifying manufacturing operations will add complexity to the business operations. At times I wonder has anyone done a dry run and economic value analysis of the proposed or even of the adopted rules on any commercial process. The proposed rules will drive manufacturing by “regulatory centricity” rather than “product centricity”. “Process and product centricity” are needed rather than “regulatory centricity”. It will take an army of technocrats time to prepare, fill and comply with the regulatory paper work. My estimate is that it will be more than the time needed to simplify and/or develop complying processes.

It seems that the regulations are being used to produce a reproducible quality product using a less than efficient process rather than having an efficient and a process from the onset that will produce repeatable quality product. Simply said the rules dictate how and what of every step of the potato peeling process needs to be documented rather than assist in creating a simple, safe and sustainable process that will result in a repeatable quality product.

“Section III. Statutory and Regulatory Requirements For Process Validation” of the proposed “Process Validation: General Principles and Practices” rules got my attention. It states the following:

“Process validation for drugs (finished pharmaceuticals and components) is a legally enforceable requirement under section 501(a)(2)(B) of the Act, which states the following:

A drug . . . shall be deemed to be adulterated . . . if . . . the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this Act as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess.”

If the Federal Food, Drug, and Cosmetic Act gives the US federal government legal enforceability option then why is the government not enforcing its legal obligation for its citizens when it comes to drugs that do not comply with specifications or are contaminated with foreign substances.

Marketing and formulation companies through their alliance market a product that meets specification and has to be produced following the rules. In the recent years we have seen increasing amounts of unacceptable product in the market. It could be due to increased amounts being outsourced and the companies are not able to or want to follow the complicated rules. If the product that does not meet the specifications shows up in the public domain it is violation of the company’s committed public obligation and trust. A question needs to be asked, “Why are the companies failing in their public commitment?”

Governments have allowed recalls of bad product hiccups. If a commercialized material does not meet agreed specifications, could the distribution of “off-spec” products be considered criminal offence by the pharmaceutical companies as they have failed to adhere to the established standards? Could the complexity of rules that outline how, what and why of manufacturing allows some of the product slipping through the quality checks in place? Could the rules act as a deterrent to competition and also prevent innovation in pharmaceutical manufacturing processes?

Our objective should be to simplify the rules and the processes that will foster innovation and competition through manufacturing simplicity and produce a consistent quality product all the time.

Girish Malhotra, PE
President
EPCOT International

The Importance of Fundamentals

Globally Johnson & Johnson is known for its integrity and product quality. Few years ago they handled the Tylenol situation extremely well and were commended for it.

It is astounding that Year 2010 has become a nightmare for Johnson & Johnson. It is heart breaking to read a statement “Certain over-the-counter (OTC) Children’s and Infants’ liquid products manufactured in the United States have been recalled as they may contain a higher concentration of active ingredient than is specified; others may contain inactive ingredients that may not meet internal testing requirements; and others may contain tiny particles.”

Overage of active ingredient and inclusion of tiny particles is simply failure of the people to do what they are supposed to do at any manufacturing operation. In any manufacturing operation people design, operate and maintain equipment to ensure that the process operates as designed. It is a good manufacturing practice to calibrate the equipment routinely to ensure that the equipment is operating as designed. Filters get replaced on a routine basis. In addition, a mass balance is made by every chemical blending operation to make sure the process is being operated at standard or better. Mass balance and cost calculations if done you on a daily, weekly or as chosen basis tell you if your costs and material usage are on track.

Any overuse of materials will show up as the material cost being higher than standard cost and will also show up as inventory shrinkage. Higher than standard cost will be a financial variance i.e. the operation is loosing money on the product. Inventory shrinkage also shows up as a financial variance. In the case of Johnson & Johnson or any manufacturing company the two safety nets, that are supposed to catch overuse, failed. In layman terms, they lost money i.e. someone was sleeping at the financial desk.

Overuse of active ingredient and contamination of particles in the product suggests that on the operations side the manufacturing, maintenance and quality control functions also failed.

What happened at Johnson & Johnson is a gross malfunction at a Global Fortune 125 company. It seems that many at J&J forgot to apply FINANCIAL AND ENGINEERING fundamentals. Based on what I have read, it seems profits took precedence over quality. Their “Quality Czar” will have his hands dirty as he cleans the house.

Girish Malhotra, PE

President
EPCOT International

Square Plug In A Round Hole: Does This Scenario Exist in Pharmaceuticals?

“Square plug in a round hole” is a statement about situations that do not fit in normal life but under the right circumstances we can live with them. If this happens in a manufacturing operation, common wisdom is that money is lost on such a product/process and it would not be commercialized. However, if it happens in an operation where the money can be recovered by passing the inefficiency costs to the customers, would any one worry? Probably not! It would be worth exploring if such a scenario prevails in the manufacture of pharmaceuticals.

Chemists/Chemical Engineers develop an optimum (quality by design) process for an active pharmaceutical ingredient. During the scale up and commercialization process they find that they do not have the right size equipment and/or the configuration that exacts their desired process. However, there is a high demand for the product. Considerable monies can be earned if we produce and market this product quickly without large investment. We can alter the process or modify the existing equipment at a minimum cost to fit the process in the available equipment. The product is being produced in equipment that is not a perfect fit. It requires continuous quality analysis and equipment cleaning to minimize contamination. Would such a process be an example of “square plug in a round hole”? Further analysis might be helpful.

Based on an optimum heat and mass balance for an active pharmaceutical ingredient (API), we need equipment of size and configuration “X” to produce the product at the lowest cost. Many manufacturing sites do not have the exact size and configuration available. However, we have equipment of size and configuration “Y” and our process could be modified to fit in it. With necessary modifications product of the desired quality can be produced. The costs would be higher than the costs of an optimized process. Product produced by such processes would require repeated analysis of the intermediates and the final product to ensure our process and equipment would deliver the desired quality product. Necessary manufacturing protocol would have to be strictly followed and enforced. Equipment would have to be thoroughly cleaned between batches. All of the associated manufacturing costs will be passed on to the customer. Due to high demand the product could be produced at different sites. The process or the equipment would have to be modified to fit the local situations.

Since we have force fitted a process in equipment that is not specifically designed for it, I would call such a process “square plug in a round hole” that has opportunities to lower costs but since the company is able to meet or exceed their profit margins lowest cost optimized process considerations and process innovation become irrelevant. Under these circumstances we also overlook “square plug in a round hole” connotation.

In the above scenario “quality by analysis” becomes a way of life. Pharmaceuticals are living in such an environment. Since the companies are able to demonstrate product quality repeatability, meet regulatory guidelines and achieve their profit margins having an optimum process or practicing the best manufacturing technology is not necessary. What do you think?

Girish Malhotra, PE

President
EPCOT International

Pharmaceutical Reverse Payments and Lower Drug Costs: An Interesting Dilemma!

US Federal Trade Commission and the lawmakers have scorned “reverse payment” also called “pay-for delay” in the pharmaceutical business. US House of Representative recently voted 239-182 to restrict such payments in the hopes that stopping such payments will reduce the cost of drugs to the consumer. Legislators would like to see the drug costs lowered for their constituents. Everyone had expected that the entry of generics would significantly reduce the drug prices. Generics have put some pressure on brand companies but their presence has not lowered the costs of drugs by significant percentage.

US Federal Trade Commission estimates that the “reverse payments” could save US customers about $ 3.5 billion dollars per year. These savings might be there but they are not worth the effort and squabble compared to the yearly US drug revenue of about $480 billion dollars. These payments are less than three day’s revenue. Since every company wants to maximize their profits for the patented drugs, use of “reverse payment” is part of doing business. These costs are passed on to the consumer. In US customers, who are covered by a health plan do not know the real prices of the prescription drugs they just pay the co-pay.

Legislation is not going to lower the drug costs. Fundamental reason for the companies to be in the business is “profits”. If any government limits the profit margins or sets the prices, they that will be in direct conflict with the charter of every company i.e. to have the highest profits. Government’s price control would discourage innovation.

We need to understand the factors of prices/costs, how they can be lowered and passed on to the consumers. Underlying fact is that all of us want to extend our life and we will pay anything for that. Drug prices are based on this sentiment. Prices are set at the highest level companies believe customers can afford. Every company in the supply chain has used this sentiment for pricing. This also covers inefficiencies of the companies.

Limiting profits is against the economic principles. Laws of economics teach us that in a fair game, only competition can lower prices. Brand companies have lowered prices when they want to promote and/or grab the market share as evidenced by recent price drops in the selected developing countries. In the recent years limited number of prescription drugs are available from well-known merchandisers [$4.00 for 30 day and $10.00 for 90 day supply]. This is a clear indication that the drug prices can be lowered and everyone in the supply chain can make their desired profit.

Regulatory and appropriate government bodies have to facilitate competition. Companies in the supply chain also have to participate in this endeavor. Lowering of drug costs to the consumer by 8-10 percent or higher will have value for consumers provided they are passed on. Less than one percent cost reduction is of no value. Addressing minor issues like “reverse payment” just placates the constituents without accomplishing anything and upsets the brand pharmaceutical companies.

Real issues that will lower the drug costs need to be addressed and no one is addressing them.

Girish MALHOTRA, PE

Microscopic Examination of Indian Pharmaceutical Acquisitions by Multinational Companies

Brand companies establishing beachhead in India is a logical choice as they see access to market to growing at 10+ percent. India is source of revenue and profit replenishment for the multinationals. End result of such acquisitions is going to higher drug prices for the masses or government intervention. It would be interesting to see what develops.

There is an underlying question about the sales of Indian pharmaceuticals companies. Why?

Since 2005 Indian companies have challenged the multinationals and have forced a landscape change. Why are the companies being sold now when they have created very successful franchises? One could say the price was too good to refuse. May be, but has anyone considered another reason i.e. lack of succession in the entrepreneur families or letting the trained managers run and grow the companies to compete with the brand companies.

Singh family (Ranbaxy) allegedly had family feud and they brought in Dr. Brian Tempest to cool the storm. However, under Singh family regime there were lapses as manifested by US FDA’s actions. Were the lapses beyond control to fix? Under these circumstances Singh family got an offer they could not refuse. Could that be the case with Piramal family?

Consolidation within India i.e. one successful company buying other pharmaceutical company is not in the culture. Thus unless there is strong succession planning, we will see repeats of Matrix Labs, Ranbaxy, Shantha Biotech and Piramal Healthcare.

If the entrepreneur families do not pass the baton to trained professionals, I believe Indian pharmaceuticals, API (active pharmaceutical ingredient) companies, formulators and other associated with the pharmaceuticals could be selling out to MNCs. It will be a case of take your money and run.

Process Centricity is the Key to Quality by Design

It would be worth reviewing future of pharma’s most discussed acronyms (PAT, QBA and QBD). The following are my interpretation of these acronyms.

PAT (Process Analytical Technologies) means various analytical methods that can be used to convey the state of the sample as soon it is tested.

QBA (Quality by Analysis) is a methodology where the intermediates are tested by “off-line” sampling. The results tell us an “after the fact” state of the manufacturing process. Repeated testing is used to tweak the process till the desired quality product is produced. Such testing is manifestation of lack of complete understanding of the chemistry, process, equipment and any and all variables that interact to produce a product.

QBD (Quality by Design) tells us that the people, who have developed and designed the process, have complete understanding of the process, equipment and their interaction as the sample tested would meet specifications any and all the time. No intermediate sampling is necessary.

Around 2001, the above acronyms were coined for the Pharmaceutical world. They were an instant buzz and synonymous with the current and future state of manufacturing. However, based on reading much of the published literature, I get the impression that “PAT” is considered a cure all and by waving this magic wand, we will produce quality product all the time. This is far from reality.

Published literature also suggests many differing interpretations of these TLA’s and that could be the one of the reasons for very little progress toward QBD adoption.

Any analytical equipment, that costs more than $30,000 (just a number) and requires an analytical chemist to operate and interpret the results for a commercial operation, is expensive. As stated earlier an intermediate process sample tells the state of the sample tested i.e. is the process on track or not. This testing will not and cannot fix the manufacturing process automatically unless the analytical equipment delivers real time results and has feedback loops to control the process stoichiometry and operating conditions. In order to have this level of process sophistication one has to have complete understanding of the chemistry, process equipment and operating conditions i.e. one has to move from “chemistry centricity” to “process centricity”.

What is process centricity? Process centricity to me means moving away from “chemistry centric” laboratory practices and commercializing unit processes by applying appropriate unit operations. This would allow operating personnel to have complete command of the chemistry, process equipment and operating conditions. They can create a process error, observe the process change and can correct the error in minimal time without producing off-spec product. Chemists and chemical engineers have to have incorporated this level of knowledge in the process. This would be perfection (almost) and will not require complex analytical methods to check the process and the product, as we will produce quality. We will achieve QBD i.e. NIRVANA.

Since majority of the APIs are fine/specialty chemicals, their manufacturing practices are very similar. Due to dosage needs the API annual manufacturing production volumes are significantly different from fine/specialty chemical volumes. Thus, it is necessary that we evaluate the current manufacturing practices. Process centricity might necessitate that we change/alter API manufacturing practices. We have to implement methods that are simple and based on good chemical engineering principles and practices. Technologies and methods exist to achieve this change but due to “chemistry centricity” we have not made any significant progress.

As I have explained in a recent article and blogs companies most suited for implementing “Quality by Design” are the API producers and the formulating companies. They have to move away from “chemistry centricity” to “manufacturing centricity” during the technology transfer and incorporate methods that do not require any intermediate product sampling and analysis. This might not look or sound easy, but is the only way to produce a product based on “quality by design”.

It is a bit disheartening for many that almost after ten years, we are still discussing PAT, QBA and QBD. If more than 51 percent of the API producers and formulators stop intermediate sampling, I will consider QBD would become a way of future life in the pharmaceutical world. If this does not happen soon (let us say in the next two to three years) my conjecture is that PAT, QBA and QBD will disappear from the pharmaceutical vocabulary like any other fad. That would be sad because we collectively would have failed to implement a good idea that not only will improve profits but also might facilitate regulatory requirements.

Girish MALHOTRA, PE
President
EPCOT International

Alternate Interpretation of Pharmaceutical TLAs; Three-letter Acronyms

Around 2001 Dr. Ajaz Hussain and his colleagues at USFDA-based on their experiences-suggested and encouraged the global pharmaceutical industry to improve their process technologies so that the manufacturing practices could be simplified and quality products produced with minimum interference. It has been a noble effort and led to the coining of two acronyms QBA and QBD. Based on the amount of printed material, I have seen considerable analysis and discussion on how to move from “A” to “D”. I would like to restate these acronyms differently in a lighter perspective with the hope that we will improve our manufacturing technologies.

In the current state of manufacture of active pharmaceutical ingredients (APIs) and formulated products, we repeatedly check intermediates and the final product for quality. This practice has been appropriately called “Quality by Analysis” (QBA). It not only prolongs the manufacturing cycles and processes but also impacts the whole business process through increased inventories of raw materials, in-process materials and finished goods. The whole business process becomes complex and lowers profitability.

I would like to rename the acronym QBA and call it “Quality by Aggravation”. Why aggravation? Meticulous sampling and analysis is necessary to ensure we follow protocol at each step. This prolongs and extends the batch cycle times. Everyone gets aggravated if anything is not done as per procedures. Intermediate product not meeting specifications either is reworked or disposed of. All this costs money. In addition, it increases work in process inventories that affects the cash flow. Additional investment could be needed to quarantine intermediates and all this lower profits. In doing all these we aggravate our life and it has been our way of life.

Aggravation (mental and financial) in pharmaceutical manufacturing processes can be alleviated if we have complete command of the process chemistry and its unit operations so that we can produce quality product with minimum or no intermediate samplings. Since we will produce products based on “quality by design” QBD, I would also like to rename this acronym to “Quality by Desire”. We will have quality production. This will simplify manufacturing process and life. Our desire to have an excellent process could significantly reduce our aggravation. It even could be eliminated.

Pharmaceutical products have to meet the strictest of the quality standards no matter how the products are produced. The question that needs to be put on the table is what should be our method of choosing to produce a quality product. “Quality by Aggravation” or “Quality by Desire” are the two choices and we have to pick one.

Most of us know the correct answer. All of us have a choice and can do what we desire. Since maximizing profitability is the ultimate goal, I am not sure why we have avoided the right path for so long. Is the industry waiting for disruptive innovation?

QBA and QBD methods are applicable to everything we do in life. When we desire anything, we make sure that our methods to achieve the goals are swift and simple. We always pick QBD. Our choice in the manufacture of pharmaceuticals and their components is “Quality by Aggravation” or “Quality by Desire”. You pick.

Girish Malhotra, PE
President
EPCOT International

HIV Drug Availability and Potential Manufacturing Opportunity

Global spread of HIV/AIDS has been and is a cause of alarm. Approximately 33.4 million people are estimated to be infected with HIV/AIDS and about 30% of this population can use the antiretroviral therapy (ART). Of this number about 42% are getting the treatment. This could be due to pricing and/or their availability or a combination of both. There are methods and means to lower the cost and increase availability. I have used AZT (Azidothymidine/Zidovudine) an ART component as an example to illustrate the need for manufacturing technology innovation that can lower prices and increase availability.

In general majority of the active pharmaceutical ingredients (API) are manufactured using batch processes. This is more due to tradition rather than the process chemistry and economics. This holds true for high and low volume actives. Some of the actives due to their chemistry and volume have become commodity chemicals and are produced by continuous processes. However, batch processing is still the preferred method of API manufacture in China and India irrespective of their volume.

Under Clinton Foundation HIV/AIDS Initiative (CHAI), prices of some of the HIV/AIDS drugs have been negotiated with the suppliers from India and China. AZT (300 milligram) tablet is priced at 13.3 cents.

Doing a reverse calculation and using about 80% tablet formulation yield, one can calculate potential bulk selling price of the azidothymidine. Using two 300-milligram tablets per day about 2.4 million pounds of azidothymidine would be needed for about 4 million patients. At $25.00 per kilo, the cost of the API content would be about 1.88 cents per tablet. If the formulation, excipient cost and profit were considered to be 5 times the cost of API (an estimate), the cost of finished tablet would be about 11.25 cents per tablet compared to 13.3 cents from CHAI. Thus the assumption of $25.00 per kilo for bulk API is not un-reasonable. All of the AZT in the above consideration is produced using batch processes.

In the coming years under the new World health Organization guidelines, if the number of people needing treatment grows to 14 Million, there would be a supply problem. The capacity of the existing batch processes would have to be increased to about 8.5 million pounds of AZT per year. Similar steps would be needed to increase capacity of other members of the ART cocktail. Other alternate is to develop and commercialize continuous processes.

A continuous process would not only increase throughput but also will lower the manufacturing cost and consistently produce product of high quality. Combination of improved manufacturing technology and throughput can easily lower costs by 20-25%. Based on the reported chemistry, it should be feasible to develop a continuous process. We should never forget that most of the actives are fine chemicals first and drugs second. Acceptance of this fact might facilitate development of better manufacturing technologies. If better technology drops the price of AZT from 11.25 cents per tablet to 9 cents this would be a significant improvement.

A continuous process would have much higher throughput than the batch processes facilitating availability of the needed drug. Plants can be ramped up and down to meet the market demand. Three plants using continuous processes and operating at about 400 pounds per hour (24/350 at 85% on-stream-time) could meet the global demand of AZT and give the operators higher profit margin. Strategy discussed above could be extended for other components of the HIV/AIDS cocktail. It would be a win-win.

A Radical Approach to Fine/Specialty API Manufacturing

Average wholesale price (AWP) of blockbuster drugs (sales greater than one billion dollar/year) and dosage determine the quantity of API needed. This calculation can be made easily based on information in the public domain. For a 200 milligram dose blockbuster, a decent process for a certain molecule at $10.00 AWP, would require about 25,000 kilos of API. API need would change with different AWP and dosage. Poor process and yield would mean that their pollution (not just carbon) footprint is much bigger. At $50 per kilo, the API revenue would be about $1.25 million dollars, which is miniscule compared to the total drug revenue. 

Due to low volumes, the global API producers resort to the easy, traditional method that we are taught through our textbooks - batch process. The nature of the batch process diminishes/prevents any implementation of “Quality by design (QBD)” methods and we resort to “after the fact” analysis and fixes, which cost both money and time. This situation is the norm for in pharmaceutical fine chemical manufacturing. 

Due to the price differential between AWP, the factory cost of API and the tablet/capsule, there is little financial incentive for the drug wholesaler to invest in manufacturing innovation. However, the API producer and the drug formulator have a major incentive to improve their profits – being the manufacturing technology innovation leader. However, a production paradigm shift on the part of producers and formulators is needed to achieve that goal. 

Creative incorporation of physical properties and unit processes, as well as manipulation of unit operations and modular plants can facilitate QBD. This will serve to ensure continuous processes producing quality product the first time and all the time. Modular plants can produce almost any combination of fine or specialty chemicals. Since the API volumes are low, they can be campaigned allowing different products to be produced by companies with proficiency or expertise in specific chemistries and/or methods. Entities with knowledge of alternative manufacturing methods can easily produce some of the actives using continuous processes. A properly designed facility can produce about 55,000 pounds of product operating 24/7 at 100 pounds per hour in about four weeks. A batch process can take longer and would require greater investment. 

Fine/specialty chemicals such as 3-(diaminomethylidene)-1,1-dimethylguanidine hydrochloride, 2-[1-(aminomethyl)cyclohexyl]acetic acid, (RS)-6-methoxy-2-((4-methoxy-3,5-dimethylpyridin-2-yl) methylsulfinyl)-1H-benzo[d]imidazole, various Fluoroquinolones derivatives, 2-[di(phenyl)methylsulfinyl]acetamide, 1-[(2R,4S,5S)-4-azido-5-(hydroxymethyl)oxolan-2-yl]-5-methyl-1,2,3,4-tetrahydropyrimidine-2,4-dione are a few examples of what can be produced by batch processes. However, continuous processes using modular unit operations can also produce these products. One must be creative and able to effectively incorporate the nuances of physical properties and reaction kinetics into the manufacturing processes. The above chemicals are examples of anti diabetic, anti bacterial, pump protein inhibitor, anti viral compound and other disease curing actives. 

Traditionally, in the development of pharmaceutical fine/specialty chemicals we get enamored with incorporating regulatory practices and guidelines before we have an excellent process that will produce repeatable and consistent quality product without “in-process” analysis of intermediates. This is like trying to fit a square peg into a round hole. For manufacturing technology innovation, we have to step out of our comfort zone. The North American automobile industry, for example, got trapped in its comfort zone with very discomforting results. Chinese/Indian or any other companies could be the “creative destructionist” and change the global playing field. 

Alternative manufacturing technologies and methods will force process efficiencies and lower the pollution footprint. API manufacturers and drug formulators must take the lead in utilizing these methods. Since such methods would be innovative, we could also see reduction or stoppage of job migration to developing countries. With the right technologies cGMP would be a given.

Girish Malhotra, PE

EPCOT International