The global market for pharmaceutical excipients, or inert ingredients such as fillers, binders, disintegrants, glidants, colorants, flavoring agents, and coatings, is estimated by various market research firms to be approximately $6 billion in 2013 and growing at 5-7% annually through 2018 (1,2). There are several trends driving this growth, including the increasing size of the branded pharmaceutical market, the expansion of the generics and biosimilars market as patents expire, the reformulation of other drugs to achieve patent extensions, the use of excipients to overcome the poor solubility and bioavailability of many new drugs, and the rise of coprocessing technologies to increase productivity and reduce costs. Recognition of the important role of excipients and the development by excipient manufacturers of substances with specific functionalities designed for pharmaceutical formulations is also leading to the development of more complex products.
At the same time, however, issues regarding the safety of the supply chain have brought attention to the need for increased regulatory controls and quality specification—for example, quality by design (QbD)—while the overall drive to reduce healthcare costs is placing significant downward pressure on excipient prices. Combined with an increasingly competitive environment in this sector, these factors are all contributing to a decline in the profit margins of many excipient manufacturers.
The consequences of recognition
"Today, excipients are coming to be regarded for their true importance by the pharmaceutical industry," says Paul Evers, a market research analyst with BCC Research (Wellesley, Mass.), a publisher of technology market research reports. In the past, excipients were typically substances produced initially for other markets, such as the food or personal care industries, and then adopted for use in pharmaceuticals. With the realization that excipients can play a major role in the performance of formulated drugs, there is now growing interest in developing substances specifically for pharmaceutical applications. These products typically have the advantage of being manufactured using more robust, carefully controlled processes that provide products of consistently high quality.
The need for the use of production processes that meet high standards is in fact another consequence of the fact that regulatory agencies have also taken notice, following a number of high profile safety/quality issues, of the potential impact that excipients can have on drug quality. "As a result, quality and safety regulations extend to deeper levels of the industry today, starting with the design of excipients and including their manufacture, distribution, and storage. Smaller businesses in the industry have been most affected, because non-compliance has resulted in severe economic losses for these players," observes an analyst from MarketsandMarkets.
Some actions that have been taken to address these issues include the publication of the European Medicines Agency Risk Assessment Guide for Excipient GMP (Good Manufacturing Practice) as part of the Falsified Medicines Directive (3) and Revision of the EU GMP Guidance of Chapter 5 (Production)– New Supplier Qualification Requirements, which includes excipient manufacturers (4). The China Food and Drug Administration also has developed a preliminary list of high-risk excipients (5) and is developing new excipient regulations.
Industry has taken steps on its own as well. The EXCiPACT Excipient GMP program, which was developed by industry experts from the European Fine Chemical Group and several other trade groups, was launched in January 2012 and is a voluntary, international scheme for the high quality certification of excipient manufacturers and suppliers to current GMP (cGMP) and current Good Distribution Practice (cGDP) standards (6). ANSI NSF-IPEC 363: Good Manufacturing Practices for Pharmaceutical Excipients is also being developed by the International Pharmaceutical Excipients Council (IPEC) and standards company NSF International in conjunction with the US FDA and will provide a stand-alone, quality system-based GMP standard that industry and regulatory agencies can use in evaluating, auditing, and certifying excipient manufacturing and quality (7).
Excipient suppliers desired such guidelines because currently, novel excipients must receive approval as part of the final drug formulation; therefore, excipient manufacturers must share production information, including possible proprietary data, with the drug formulator. With the ability to demonstrate compliance with GMPs, such data provision won’t be necessary.
Even so, there will be additional compliance requirements, particularly in Europe, for both drug formulators and excipient manufacturers, according to an analyst from MarketsandMarkets. Pharmaceutical companies will need to conduct risk assessments for pharmaceutical excipients and ensure that they meet quality standards and conduct audits of their excipient suppliers. Excipient manufacturers, meanwhile, will need to implement quality management systems that meet the more detailed requirements of the pharmaceutical industry and prepare for a large number of audits. Most importantly, increased interaction between drug and excipient manufacturers is required to achieve effective quality risk assessments and the development of common control and risk mitigation strategies, the analyst notes.
Pathways to innovation
Despite the challenging regulatory environment, there is a significant desire for the development of innovative excipients, according to Evers. "It is quite possible that the level of excipient innovation will double over the next 5 years, depending on how soon the economy recovers," he says. BCC Research points in particular to growing interest in coprocessing for efficiency and the increasing use of oleochemicals (materials derived from biological oils or fats that are lipophilic and often have a high molecular weight) for improving the delivery of poorly soluble drugs. Other technologies, such as low permeability solubilizers, absorption enhancers, stabilizers for nanoscale carriers and orally disintegrating tablets, and replacements for animal-derived substances, are also under development. Continued innovations based on microcrystalline cellulose, which BCC believes is the most important excipient introduced in the last 50 years, will also be important in the future. Coprocessed excipients consisting of more than one substance and can be prepared using a number of different processes, such as granulation, spray drying, melt extrusion, milling, and others. The method depends on the physical characteristics of the individual excipients and the desired properties of the coprocessed excipient. Both excipient manufacturers and drug formulators must keep in mind, however, that the properties and safety profiles of coprocessed excipients may not be the simple sum of the characteristics of the individual excipients alone.
The excipient market can be broken down by product type and by functionality. There are three main categories of products: organic, inorganic, and other (largely USP water). Organic excipients, including carbohydrates, proteins, oleochemicals, petrochemicals, and other organic chemicals, account for the largest percentage of the market (85-95% depending on the market analysis). Oleochemicals are not surprisingly expected to experience the largest growth rate of all of the organic excipients. Inorganic chemicals, including calcium compounds (phosphate, calcium sulfate, and calcium carbonate), metal oxides, and halides, account for 5-10% of the excipients market, according to MarketsandMarkets. By functionality, fillers and diluents, binders, suspension and viscosity agents, and coating agents are the leading categories of pharmaceutical excipients, and all are expected to show healthy growth through 2018.
It should also be noted that the pharmaceutical excipients market is highly fragmented, in large part due to the fact that most excipients, as mentioned above, were not originally developed for pharmaceutical applications. MarketsandMarkets reports that in 2012, none of the leading excipient manufacturers, such as BASF, Ashland, The Dow Chemical Company, FMC, Roquette, and JRS Pharma held more than a 10% share, and the top 10 companies accounted for just 60% of the market. The remainder was comprised of numerous smaller companies, with many located in emerging markets such as China, India, and Brazil.
1. BCC Research, Excipients in Pharmaceuticals, (Wellesley, Mass., October 2013)
2. Markets and Markets, Pharmaceutical Excipients Market [By Products (Carbohydrates, Oleochemicals, Petrochemicals, Polymers, Microcrystalline Cellulose, Sugar, Calcium carbonate), By Functionality (Fillers, Binders, Lubricants, Preservatives)] – Global Forecast to 2018, (November 2013).
3. European Commission Health and Consumers Directorate,Draft Guidelines on the Formalized Risk Assessment for Ascertaining the Appropriate Good Manufacturing practice for Excipients of Medicinal Products for Human Use, Feb. 2, 2013. Accessed Feb. 12, 2014.
4. European Commission Health and Consumers Directorate-General, Proposed Draft of Chapter 5: Production in The Rules Governing Medicinal Products in the European Union (EudraLex) Volume 4: Good Manufacturing Practice: Medicinal Products for Human and Veterinary Use, Accessed Feb. 12, 2014.
5. China Food and Drug Administration, Preliminary list of high-risk excipients (in Chinese). Accessed Feb. 12, 2014.
6. EXCiPACT, EXCiPACT Excipient GMP program.
7. NSF International , NSF/ANSI 363 – 20xx, Issue 1, Draft 1 (April 2011) Draft Standard for Pharmaceutical Excipients Good Manufacturing Practices for Pharmaceutical Excipients. Accessed Feb. 12, 2014.