Emerging markets

PharmTech: Emerging markets play an important role in the growth strategies of many pharmaceutical companies. How do you see manufacturing evolving to serve emerging markets?

Maddaluna (Pfizer): Different markets have different business needs, and it's important to fully understand the scope of those needs as well as the pharmaceutical company's specific business goals within that market. What does "presence in the market" mean specific to a pharmaceutical company's business goal of manufacturing versus getting products to customers within that market? There are different business requirements for different markets, and the industry has adopted a number of models in response—for example, partnership, capital investment, and expanding existing operations.

Biologics

PharmTech: Many pharmaceutical companies are intensifying their product development in biopharmaceuticals. With that change also come changes in manufacturing requirements. How do you think these changes affect the pharmaceutical manufacturing model?

Maddaluna (Pfizer): For Pfizer, staying competitive means staying ahead of the curb, anticipating change and being positioned to respond strategically and with agility to the changes and challenges of the evolving global pharmaceutical industry.Adapting to changes in manufacturing requirements requires balancing capital investment against control—in other words, ensuring the same level of Pfizer quality across our internal and external operations. Our external operations absolutely have to be run like our internal operations with the same processes, procedures, and policies in place externally as we have internally.

Bailey (PwC): The shift to biotech is a good example of the challenges facing traditionally chemical-based pharma companies. There are others too, for example, the growing complexity of product components that might include a companion diagnostic, a device, data-collection and transmission capability, and a service wrapper.

One recent example is a miniature digestible chip developed by Proteus Biomedical that can be attached to a conventional oral medicine, and that can send back data. The chip sends a signal to a sensing device worn on the skin, which records the time the medicine is ingested as well as measurements for certain vital signs. The information is then forwarded wirelessly to the patient's doctor. Novartis is currently testing the chip on patients taking its blood pressure treatment Diovan, and reports that compliance increased from 30% to 80% in six months. This further reinforces the move away from the "one-stop in-house shop" model and the move towards supply organizations whose primary role is not manufacturing, but rather the coordination of the activities of many networked entities to deliver a product that drives measurable clinical outcomes for the patient.

Quality by design

PharmTech: FDA's quality-by-design (QbD) initiative has created a science- and risk-based approach in pharmaceutical development and manufacturing. How has QbD changed or might it change the model for pharmaceutical manufacturing? What role do you think continuous manufacturing will play?

Maddaluna (Pfizer): We focus strongly on codevelopment with our research and pharmaceutical science groups and that won't change. That said, small-molecule (chemical synthesis) products and large-molecule (biopharmaceutical) products are distinct. We'll continue to follow the same codevelopment process for small and large molecules, but in parallel. Continuous manufacturing will play a role in terms of delivering cost, high quality, and efficient operations.

Bailey (PwC): QbD presents a real opportunity for companies to achieve dramatic improvement on the front end of the product life cycle by reducing process development and scale-up time and further down the road by reducing ongoing manufacturing costs. This is especially true for more complex molecules and dosage forms, where QbD can be a tool for reducing risk, time-to-market, and costs.

Process analytical technology (PAT)-enabled continuous manufacturing will ultimately allow significant reductions in manufacturing cost. We see companies making more progress in chemical API manufacture than in drug product or biotech API manufacture. However, we believe the pace of adoption will continue to accelerate for two primary reasons: the regulatory environment (which has historically insisted on batch testing) is becoming more supportive of process analysis and real-time release; and the economics are catching up to the industry.

Because of the high gross margins the industry has historically enjoyed, pharma has not had to worry obsessively about efficiency. But in what other industry would top management tolerate 30% asset utilization rates or one-to-two month manufacturing cycles when cycles measured in days are possible? The need to create lean and adaptive cost structures will inevitably force companies to adopt continuous manufacturing technologies. This is an attractive future, and there are challenges to getting there, but the challenges aren't primarily technical. Continuous processing and real-time release are well-established in other sectors, including chemicals and food and beverage. Rather the more significant challenges relate to culture, mindset, and change management. For example, pharma companies tend to work with "manufacturing islands, split in unit operations" where every unit of operation is more or less independent from an integration point of view. Changing to an integrated approach, which is standard in many other industries, is a big step for pharma.

Villax (Hovione): FDA has made it abundantly clear that QbD is the future. This drives the need to bring development and manufacture much closer than in the past, to achieve far greater depth of regulatory and scientific knowledge, and for bigger up-front budgets. Moreover, QbD is the key to operational excellence; otherwise continuous-improvement implementation is seriously handicapped. Continuous manufacture is just another tool in your kit; like "horses for courses," it sometimes comes in handy. Going forward, expect the breadth of technologies that are available to solve problems to expand dramatically, making it virtually impossible for Big Pharma to have them all in-house. So new technologies will be another reason to outsource; this will make technology-rich CMOs materially differentiated.

Into the future

PharmTech: What will be the top issues shaping the environment for pharmaceutical manufacturing in 2011?

Maddaluna (Pfizer): A greater degree of flexibility to respond to market needs. More strategic collaboration between research and manufacturing. A more streamlined process of regulatory interaction and a heightened focus on partnering with global regulatory agencies. Rising interest in new technologies; that said, contract manufacturing will continue to have its place, generally for high-volume products with multiple steps. Greater emphasis on external partnerships to enable strategic business goals. Growth across multiple business requirements and environments—emerging markets, established products, and large molecules, for example.

Bailey (PwC): The top items are:

• Quality management (read the headlines).
• Cost management—healthcare reformin the US will absolutely up the ante on the need for pharma companies to operate efficiently, and compared to other industries, pharma manufacturing is significantly inefficient.
• Flexibility and adaptability—building a supply organization that will meet the needs of the business as the business model changes. For example, the ability to scale up gradually as opposed to in a big-bang fashion as the adoption of a live-license product-approval framework drives a much longer timeframe between launch and peak sales of a product.
• Differentiated supply models—the needs of emerging markets are different than the needs of established markets. Most drug companies are moving aggressively into the "established-products" market but are trying to do so with the traditional pharma supply model.
• Role definition—in a world of more complicated products of which traditional pharmaceuticals may be one component (i.e., diagnostic, therapy, feedback loop, service wrapper all in one), what is the role of the pharmaceutical company's supply-chain organization? How is it changing? What does that mean for the kinds of skills we need and the kinds of partners we need?

Villax (Hovione): Size and global footprint will matter, so expect consolidation. As Big Pharma outsources strategically, expect shortage of quality capacity. Intense regulatory oversight will impose new rules on how you manage your suppliers and your manufacturing, and how you prepare filings. CMOs will need to graduate to Big Pharma's level of technical, scientific, and regulatory sophistication. Tougher technical problems will have to be solved faster and at a lower budget by new technologies.