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Demand Increases for Novel Excipients, but Manufacturers Still Face Challenges
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
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
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.