Pharmaceutical development and manufacturing is often a global undertaking, requiring facilities and local market know-how. Cristin Grove, director, Global Contract Manufacturing for Pfizer CentreSource, discusses that company’s approach to accessing and serving emerging markets.
Emerging market presence
PharmTech: Emerging markets are an important part of the strategy of major pharmaceutical companies. What are the implications from a supply (manufacturing) perspective in terms of a partnership strategy for finished-product manufacturing? What can a contract service provider offer in terms of access and knowledge of the market?
Grove: Pfizer has had and will continue to maintain a strong presence in emerging markets. The emerging markets have experienced double-digit growth in population resulting in increased demands for improved healthcare while providing products at a reasonable cost because most purchases are out-of-pocket to the consumer.
Pfizer Global Supply (PGS), which has 19 manufacturing sites in emerging markets, understands the need to be located in the market in order to develop relationships with the respective governments, healthcare providers, and patients. Through access to Pfizer’s local manufacturing site (LMS) organization, Pfizer CentreSource (PCS) is able to provide our customers access to our facilities and technology where a relationship has already been established with the local government and community.
BRIC: Competitive landscape
PharmTech: In looking at certain key markets, beginning with the BRIC countries (Brazil, Russia, India, and China), what would you identify as the unique challenges/issues in each of those markets in developing a pharmaceutical manufacturing strategy (finished product) overall and related partnership strategy for manufacturing (i.e., contract service provider) in those countries? How would you describe the competitive landscape in those markets?
Grove: Every market provides its own challenges. They are each unique in the regulatory and technical perspective as well as in the culture of conducting business. Many of these markets are still defining their health systems and meeting the needs of the patient while being able to provide medicines at an affordable price.
Brazil has very stringent requirements regarding segregation of animal and human health products. There is also a long registration timeline for approval of regulatory filings.
China and India have been markets with low labor and operating costs. Unfortunately in some cases, these lower operating costs are based upon manufacturing facilities that are not operating at the required levels of compliance with cGMP. Companies need to invest in improvements to facilities and operating procedures, which will only drive up the cost of the products.
PGS has the highest standards for quality and adherence to cGMPs. When our customers entrust us to manufacture their products, they are being provided the same level of quality oversight as a Pfizer product would receive. We feel this is one of our strongest competitive advantages in the CMO space.
PharmTech: How would you access market opportunity in other emerging markets outside of the BRIC countries (such as Turkey) for pharmaceutical industry growth and related opportunity for contract manufacturing (finished product)?
Grove: PGS has 19 manufacturing sites in our LMS organization and an additional site being built in Saudi Arabia. There are interesting opportunities in other markets outside of the BRIC countries where there are fewer competitors, smaller populations and growth rates, and less potential spending which puts more emphasis on being present in the market to provide access to medicines. PGS has understood for a long time the need to be in the local markets to be able to understand the changing market conditions and provide cost-competitive products to customers. PGS has a manufacturing site in Istanbul that currently provides contract manufacturing and has established third-party business procedures. PCS is also currently providing contract manufacturing through PGS sites in Jakarta, Indonesia, and Buenos Aires, Argentina.
Emerging middle class
PharmTech: Are there other key trends/issues as they relate to building a supply network in emerging markets?
Grove: Big Pharma has been relying on an expansion of the middle class in the emerging markets to drive the demand for access to more medicines, pushing the need to have local manufacturing. Current trending in the BRIC markets shows consumer spending is down and economic growth relatively flat with the exception of single-digit growth in China. The challenge will continue to be how to supply medicines at an affordable cost while still making it economically attractive to the manufacturer. In addition, many markets require manufacturing to be in the market in order to be able to sell. If a company does not already have an existing manufacturing site, they either will need to invest or find a partner.
Through working with PCS, customers have access to existing facilities in the market that have available capacity. This may eliminate the need for an investment when capital spending is a challenge across our industry.