 of London that the company would outsource all of its drug manufacturing within 10 years, the pharmaceutical contract manufacturing industry thought it had received unqualified validation from Big Pharma. David Smith, AstraZeneca's executive vice-president of operations, told reporter Robin Pagnamenta that manufacturing "is not a core activity" for the company, and admitted that there are a lot of organizations that are better at manufacturing. 

Smith's radical perspective on remaking the pharma supply chain no doubt reflects his experience outside the pharmaceutical industry. After starting his career at Wellcome Foundation (a predecessor company to GlaxoSmithKline), Smith held positions at consumer products companies, including Estee Lauder  and Timberland. Those hyper-competitive industries depend on complex global supply chains incorporating far-flung contract manufacturing operations. 

Alas, AstraZeneca quickly backtracked from Smith's candid statements. The day after the 

 article appeared, the company issued a clarification, stating that it is pursuing outsourcing "where there is a sound business case" and that its efforts are focused primarily on active pharmaceutical ingredients (APIs).   

Around the industry, Smith's comments are now interpreted not as a statement of corporate strategy, but rather as a "shot across the bow" aimed at people within the company who are resisting the changes that AstraZeneca must embrace. Like other major pharmaceutical companies, AstraZeneca is facing substantial revenue losses in the next five years as key products lose patent protection, and it must restructure its operations to survive. Because research anddevelopment (R&D) operations are viewed as critical to the replacement of those lost revenues,  sales, manufacturing, and supply chain activities will bear the brunt of such restructuring efforts. 

Aside from the cultural resistance, pharma supply chain managers face a complex calculus when sorting out their supply-chain and manufacturing strategies (see Figure 1). The decision regarding whether to manufacture a product in-house or outsource must weigh a number of variables. 

 Unit cost of goods, dependability of supply, and intellectual property protection are the most basic factors in making supply chain decisions. Costs are heavily impacted by the fixed cost nature of pharmaceutical manufacturing: the overhead of maintaining a facility's compliance with good manufacturing practices is largely the same regardless of the volume that runs through it. Unless a facility is to be closed or divested altogether, there is considerable pressure to put more products into it to absorb those fixed costs.  

 A number of financial factors beyond direct manufacturing costs impact the supply decision. Corporate cash flow can be enhanced by shifting manufacturing to tax-advantaged locations or accepting the operating and capital investment subsidies offered in countries such as Ireland and Singapore. Exchange rate movements such as the current depreciation of the US dollar against the euro and other currencies, can shift cost advantage between manufacturing locations.  

Having a manufacturing or R&D operation in a particular country can ease regulatory approvals in that country, despite treaties establishing unified markets such as the European Union. Labor laws in many countries hinder the shutdown of noneconomic manufacturing facilities, causing companies to use in-house manufacturing assets that should really be shuttered. 

 "Cost flexibility" is the new mantra of pharmaceutical executives, which usually translates into operations with fewer fixed costs. That development should favor contract manufacturers, but they often offset that advantage by insisting on "take-or-pay" agreements that limit their own downside.  

The complex interplay of these variables probably means that it will never make sense for a major pharmaceutical company to outsource 100% of its manufacturing requirements. There will always be an argument to keep strategic products in-house, whether they be high volume blockbusters with substantial economies of scale or unique high-value technologies that shouldn't be shared. 

What we will see, and are already seeing, is the emergence of sophisticated mixed sourcing models, which more effectively integrate contract manufacturers and in-house operations. Some major companies are already using such models to their advantage (e.g., Wyeth has long depended on contract manufacturing organizations [CMOs] for its API requirements, and Genentech has effectively used a mix of in-house and contract manufacturing operations). Innovative business models such as the one pioneered by 

 (Lonza, headquartered in Basel, Switzerland, will build and operate a cell culture facility dedicated to Genentech in Singapore, partially funded by local entities), will become more common. 

Indeed, despite the backtracking in AstraZeneca's response to Smith's comments, the company is already well on its way to establishing a sophisticated sourcing model for its manufacturing requirements. Earlier this year, it established a sourcing center in Shanghai that will be the focus of its worldwide sourcing activities and by its own admission is actively establishing supply relationships in Asia and elsewhere. It is also divesting redundant facilities in its manufacturing network, most recently a parenteral manufacturing site in France that it sold to contract manufacturer 

Corporate politics and financial complexities notwithstanding, it's clear that some major pharmaceutical companies are committed to radically changing their supply-chain models. Now it's up to the CMOs to retool their business models to respond to the opportunity.  

is president of PharmSource Information Services, Inc., and publisher of 

Articles

Outsourcing

Candid comments from a Big Pharma executive highlight the complexity of contract manufacturing.

Mixed Message for Contract Manufacturers

As 2007 comes to a close, one of the important measures of pharmaceutical industry growth, the number of approved new molecular entities (NMEs), is down from last year as Big Pharma continues to have difficulties in bringing new drugs to market.   

Table I: New molecular entities approved as of November 28, 2007.  

 approved 15 new drug applications (NDAs) for NMEs as of the end of November 2007 (see Table 1) and one new biologics application (BLA). This number is down from 2006 totals  when FDA approved 22 new products (18 NDAs for NMES and four BLAs) (see Table II). 

Table II: New molecular entities approved in 2006. 

Ten of the 15 approved NMEs came from Big Pharma, which was on par with NME approvals from Big Pharma in 2006. In 2007, NMEs from Big Pharma were:    

"Altabax" (retapamulin) and "Tykerb" (lapatinib) by 

"Tasigna" (nilotinib) and "Tekturna" (aliskiren) by 

In 2007, Novartis and and GlaxoSmithline were the only two companies with more than one approved NME. Each company had two. GlaxoSmithKline received approval for its anticancer drug Tykerb and an antibacterial oinment Altabax. Novartis received approval for its hypertensive drug Tekturna and its anticancer drug Tasigna. In 2006, Pfizer and Merck & Co. were the only companies among the top 50 pharmaceutical companies with more than one approved NME. Pfizer had two NMEs approved in 2006: the anticancer drug "Sutent," (sunitinib) and the smoking-cessation drug "Chantix" (varenicline). Merck & Co. received approval for "Zolinza" (vorinostat) to treat cutaneous T-cell lymphoma and for its diabetes drug "Januvia" (sitagliptin). Schering AG (which was acquired by Bayer in 2006), Novartis, and GlaxoSmithKline were among the major companies that also had NMEs approved in 2006. And Amgen, Genentech, and Genzyme were top companies that received BLA approvals for NMEs in 2006. These biologics were:  

As of the end of November 2007, only one new BLA was approved: "Soliris" (eculizumab) by 

This month, several FDA advisory committees will meet to consider other NDAs for NMEs.  These include tetrabenazine by 

In addition to the slowdown in NMEs, several major pharmaceutical companies were plagued with safety issues and concerns for key products in 2007. Perhaps most noteworthy were safety concerns regarding GlaxoSmithKline's antidiabetes drug "Avandia" (rosiglitazone). Sales of the Avandia product group in 2006 were £1.6 billion (3.3 billion). Following FDA review and testimony, GlaxoSmithKline did not have to withdraw the drug from the market, but in November the company reported that it had to revise its boxed warning on the drug  to state that available data on the risk of myocardial ischemia are inconclusive. In October, Bayer voluntarily suspended marketing of  the antifibrinolytic drug "Trasylol" (aprotinin) based on safety concerns that the drug contributed to increased deaths. Also, last month, FDA issued an early communication for Pfizer's smoking cessation product Chantix, only one of two Pfizer NMEs approved in 2006. FDA is evaluating postmarketing adverse events reports of behavorial and mood changes. Novartis's  "Prexige" (lumiracoxib), a COX-2 inhibitor for treating osteoarthritic pain, is undergoing European regulatory review on the basis of safety concerns following marketing suspension of the product in the United Kingdom and Germany in November.  

Also, in 2007, several high-profile late-stage drugs were tied to adverse events problems as they neared filing with FDA (1). These included the antidiabetes drug "Galvus" (vildagliptin) by Novartis and the oral antiplatelet agent prasugrel by 

In November, Novartis provided a safety update to European regulators and proposed changes to European prescribing information for Galvus. Novartis received an FDA approvable letter and is in discussions with the agency, said Novartis in a November 6, 2007 release.  

In October, Eli Lilly and Daiichi Sankyo announced that they were suspending dosing in two small trials of prasugrel until protocol amendments can be completed and approved. The companies emphasized that the change  does not affect the overall clinical development program for prasugrel.  

Changing patterns for pharmaceutical industry growth

As pharmaceutical companies face an innovation drought, overall growth in the global pharmaceutical industry is expected to slow. The global pharmaceutical market is projected to increase between 5 and 6% in 2008 to reach $735–745 billion, according to 

 (Norwalk, CT). This pace is down from growth of 6–7% in 2007. In the US and the five largest European markets, sales growth in 2008 is projected at 4–5%, marking a historic low for the US market, according to IMS. 

"In several respects, 2008 marks an important inflection point for the global pharmaceutical market," says Murray Aitken, senior vice-president of Healthcare Insights at IMS Health, in a company release. "For the first time, the seven largest markets will contribute just half of overall pharmaceutical growth, while seven emerging markets will contribute nearly 25% of growth worldwide." These seven emerging markets (Brazil, China, India, Mexico, Russia, South Korea, and Turkey) are expected to grow 12–13% next year to $85–90 billion, according to IMS. 

In 2008, IMS projects that 29 new innovator drugs will be launched, 80% of which will be primarily prescribed by specialists. Overall growth in the audited specialty-driven market is projected to increase between 14–15% in 2008 and reach sales of $295–$305 billion, according to IMS. 

Although specialist-based drugs are expected to increase in 2008, drugs for the primary care market will decline, in part, from sales erosion from generic drugs. "...As the impact of established pharmaceuticals losing patent protection accelerates, we see a decline for the first time in the size of the $370–380 billion audited market for primary care-driven drugs," says Aitken. The generics market is expected to grow at 14–15% in 2008 and reach sales of more than $70 billion, according to IMS. Drugs with annual sales of approximately $20 billion will face patent expiration in 2008. Key products coming off patent include "Fosamax" (alendronate) by Merck & Co., "Risperdal" (risperidone) and "Topamax" (topiramate) by Johnson & Johnson, "Lamictal" (lamotrigine) by GlaxoSmithKline (London), and "Depakote" (divalproex) by 

 (Abbott Park, IL). These drugs are expected to lose market exclusivity in one or more major markets in 2008, according to IMS. 

APIs

The number of new molecular entities approved by the US Food and Drug Administration is down this year as the pharmaeutical industry continues to face an innovation drought.

2007 Ends with a Drought in New Molecular Entities

2007 was a year of transition for the global pharmaceutical industry. Several pharmaceutical majors announced or moved forward with restructuring plans. Several  large mergers and acquisitions occurred, including 

 (London) $15.6-billion acquisition of MedImmune (Gaithersburg, MD) and 

 (Kenilworth, NJ) $14.4-billion acquisition of Organon BioSciences (Oss, Netherlands). And, Big Pharma continued its deal-making to build its position in biologics.  

Restructuring among the pharmaceutical majors

In response to lower-than-expected growth rates, several Big Pharma companies announced restructuring and cost-saving plans. In October, 

(London) announced a £1.5-billion ($3.1-billion) operational excellence program designed to improve the productivity of its operations. The program is expected to deliver total annual pretax savings of as much as £700 million ($1.45 billion) by 2010. About 40% of the savings will come from the company's manufacturing operations. The total savings will partly mitigate the expected impact of generic competition and low sales of "Avandia" (rosiglitazone), the company's antidiabetes drug that faced increased regulatory scrutiny over safety concerns with the product.  

 (New York) affirmed its goal  to reduce the total pretax component of its adjusted growth income by at least $1.5–2.0 billion in 2008 compared with 2006. These goals are part of ongoing effort by the company to improve its cost position through reductions in staff and manufacturing operations. Key achievements include the reduction of the number of manufacturing plants in its global network from 93 four years ago to 60 this year. The cumulative effect is a 50% reduction in the number of plants and a 35% decrease in manufacturing employees compared with 2003. As part of that cost-cutting strategy, Pfizer has stated its plans to increase its level of outsourcing. "We currently outsource the manufacture of approximately 17% of our products on a cost basis and plan to increase this substantially by 2010," said Pfizer Chairman and CEO Jeffrey Kindler in a June 2007 release.  

AstraZeneca announced in July it will cut its workforce by 10% to reduce costs. The company will eliminate 7600 jobs, an increase from the 3000 job cuts it had earlier announced in February.  

 (New Brunswick, NJ) announced initiatives to generate pretax, annual cost savings of $1.3–1.6 billion for 2008. The company estimates that it will eliminate 3–4% of its global workforce in accordance with local works councils and labor laws. 

 (Thousand Oaks, CA) announced in August that it will cut 2200–2600 jobs as part of a plan to increase operational efficiencies. The job cuts are the first ever for the company and will result in a 12–14% staff reduction. Amgen's plan also includes closing certain production operations and reducing planned capital expenditures by approximately $1.9 billion during 2007–2008. Amgen expects its initiatives to be completed by 2008 and to generate $1.0–1.3 billion in pretax savings. The cumulative pretax restructuring charges associated with these changes are expected to be $600–700 million in 2007 and 2008, which included $289 million for asset impairment and related costs reported in the second quarter of 2007. In October, Amgen announced that it will indefinitely postpone the planned design and build-out of a bulk manufacturing facility in Cork, Ireland. Amgen announced in January 2006 plans for investing $1 billion in new process development, bulk manufacturing, and fill and finish facilities in Cork. 

As is usually the case, merger and acquisition activity also provided the basis for restructuring in 2007. 

 (Berlin), formed in 2007 from the acquisition of Schering AG (Berlin AG) by 

 (Leverkusen, Germany), moved forward with an integration plan. The plan, announced in March, involves eliminating 6100 jobs. The staff reduction includes 1000 positions in the United States and 3150 in Europe. Some 1850 production positions and 1400 global research and development functions will be cut by 2009. Bayer estimates the move will save approximately EUR 700 million ($918 million).  

One of the largest deals announced in 2007 was Schering-Plough's  $14.4-billion acquisition of Organon BioSciences, the human and animal health businesses of 

 (Arnhem, Netherlands). The move added to Schering-Plough's position in central nervous drugs, women's healthcare products, and biologics capacity for developing human vaccines. Schering-Plough gained five drugs in Phase III development. Schering-Plough expects to achieve annual costs savings of $500 million over the next three years.  

Schering-Plough's move served multiple functions in providing the company with late-stage candidates, strengthening select therapeutic areas, and building its biologics platform, but other deals were noteworthy for their singular focus on biologics. Chief among these deals was AstraZeneca's $15.6-billion acquisition of MedImmune. The move increases the percentage of biologics in AstraZeneca's pipeline from 7% to 27% and enlarges its total pipeline by 45 projects to 163 projects. AstraZeneca also gained biologics manufacturing capacity. MedImmune has biologics manufacturing capacity of more than 30,000 L planned by 2010, with the potential to increase capacity to as much as 60,000 L with further modest investment. AstraZeneca said this capacity secures its biologics production requirements for the long term and avoids the need for major near-term green-field manufacturing investment by company to support its biologics strategy, according to an April 2007 release at the time of the deal announcement.  

The acquisition of MedImmune follows AstraZeneca's $1-billion acquisition of Cambridge Antibody Technology in 2006, which provided the company with a position in antibody research, development, and technology.   

 (Darmstadt Germany) closed on its CHF 16.6 billion ($13.3 billion) purchase for a majority stake in the European biotechnology company 

 (Geneva, Switzerland). The integration of Serono provides Merck KGaA with a biopharmaceutical products portfolio with 2005 pro forma sales of around EUR 3.6 billion ($4.7 billion) and about 14,500 employees worldwide. Merck KGaA's strategic push into biologics was married with a plan to divest its postion in generic drugs. In October, 

 (Canonsburg, PA) completed its EUR 4.9-billion ($6.7-billion) acquisition of Merck KGaA's generics business.  

 (Tokyo) US subsidiary Astellas US Holding (Deerfield, IL) agreed to acquire 

 (Santa Monica, CA), a biotechnology company specializing in antibody research and development, for $387 million upfront and an additional $150 million to Agensys shareholders, conditioned on Agensys achieving certain milestones. Agensys applies differential gene expression technology to human tissues and has identified 30 proprietary targets in 14 cancer types, uses an optimized hybridoma method to generate fully human monoclonal antibodies, and has a GMP manufacturing facility for producing investigational antibodies for clinical trial material supply for Phase I and early Phase II trials. The deal is expected to close by the end of December 2007. 

 (New York) agreed to acquire the biopharmaceutical company 

 (Waltham, MA) for $430 million. Adnexus is a developer of a proprietary class of biologics called "Adnectins," which are derived from fibronectin, an extracellular protein that is naturally abundant in human serum.  

To build its pipeline, biotechnology leader Amgen acquired Ilypsa (Santa Clara, CA), a private company that develops nonabsorbed drugs for renal disorders, for $420 million. The acquisition includes Ilypsa's ILY101 drug candidate, a late-stage selective phosphate binder that treats hyperphosphatemia in chronic kidney disease (CKD) patients. Amgen also will gain Ilypsa's proprietary, high-throughput, discovery and development platform. Also in 2007, Amgen acquired Alantos (Cambridge, MA), a privately held company developing treatments for diabetes and inflammatory disease for $300 million. Alantos' lead drug candidate, ALS 2-0426, is a DPP-IV inhibitor in clinical development (Phase IIa) for treating Type 2 diabetes.

 (Basel, Switzerland) expanded itsits collaboration with 

 (Martinsried/Planegg, Germany), a biotechnology company specializing in fully human antibodies. Under a new 10-year agreement, which may be extended by Novartis for an additional two years, Novartis and MorphoSys will jointly discover and optimize antibodies in a wide range of diseases. MorphoSys will also offer increased personnel support for these projects.  Novartis will make total payments, including full-time equivalent support, technology transfer, and annual licensing fees of approximately $600 million to MorphoSys. Potential payments could exceed $1 billion depending upon achieving certain clinical milestones. Biologics now represent roughly 25% of Novartis's preclinical drug candidates, and the alliance will support further development of its biologics portfolio.

 (Indianapolis, IN) signed a licensing deal worth up to potentially $600 million ($43 million upfront) with the biopharmaceuticla company 

 (Rockville, Maryland). Under the agreement, the companies will develop and commercialize teplizumab, a humanized anti-CD3 monoclonal antibody, as well as other potential next-generation anti-CD3 molecules to treat autoimmune diseases.  

 (Cambridge, Massachusetts) formed an alliance worth as much as $760 million ($70 million upfront) to develop and commercialize otelixizumab, a humanized, anti-CD3 monoclonal antibody that could potentially treat various autoimmune and immune-mediated inflammatory diseases, including Type 1 diabetes.  

 (Basel, Switzerland) acquired Therapeutic Human Polyclonals (Sunnyvale, CA) for $56.5 million as part of move to enhance its position in protein research. Pfizer acquired BioRexis Pharmaceutical (King of Prussia, PA) and gained a position in biologics technology. BioRexis has a fusion technology platform to enhance the half-life, efficacy, and safety of therapeutic proteins and peptides. In November, Pfizer agreed to acquire for $164 million 

 (Wellesley, MA), a biopharmaceutical company. The company specializes in vaccine adjuvant technology and is developing a new class of drugs focused on toll-like receptors, which work by stimulating or blocking  immune system receptors. 

Outside of biologics, several pharmaceutical majors acquired companies to build their pipelines. Last month, GlaxoSmithKline agreed to acquire 

 (Liberty Corner, NJ) for $1.65 billion in cash. Reliant is a privately held specialty pharmaceutical company with a focus on cardiovascular drugs. Reliant holds the US rights to "Lovaza" (omega-3-acid ethyl esters), a drug for treating high levels of triglycerides. The drug adds to GlaxoSmithKlines' cardiovascular portfolio, which faces increased generic competition for one of its key cardiovasular drugs, "Coreg" (carvedilol).  

In a licensing deal, GlaxoSmithKline and 

 (Lexington, MA) agreed to jointly develop and commercialize STA-4783, an injectable, small-molecule, oxidative stress inducer for treating metastatic melanoma that is entering Phase III clinical development. The total value of the pact, conditioned on achieving certain regulatory and development milestones, is $1 billion. 

In a deal of Japanese mid-sized pharmaceutical companies, Tanabe Seiyaku and Mitsubishi Pharma merged to form 

 (Osaka, Japan), effective Oct. 1, 2007. The combined company has sales of roughly 407.8 billion yen ($3.4 billion), making it the fifth largest pharmaceutical company in Japan. It has domestic ethical pharmaceutical sales of 384.7 billion yen ($3.2 billion).

In other moves, AstraZeneca acquired for $150 million Arrow Therapeutics, which focuses on the discovery and development of antiviral therapies. Eli Lilly acquired Hypnion (Lexington, MA) for $315 million. The move gave Lilly several new early-stage drug candidates as well as HY10275, a drug candidate to treat insomnia that is currently in Phase II development. In September, Merck completed its $367-million acquisition of NovaCardia (San Diego, CA), a privately held clinical-stage pharmaceutical company focused on cardiovascular diseases.  

Mergers, acquisitions, and restructuring

Big Pharma's strategic push into biologics and continuing restructuring are among the highlights for 2007.

2007: The Year in Review

The adoption of quality by design (QbD) in the pharmaceutical industry is an evolving process. To faciliate the implementation of QbD, the  

 launched a pilot program in 2005 to allow participating firms an opportunity to submit chemistry, manufacturing, and controls (CMC) information demonstrating application of QbD. Chi-wan Chen, deputy director of the Office of New Drug Quality Assessment (ONDQA) at FDA's Center for Drug Evaluation and Research, recently outlined some key lessons learned from the CMC pilot. Chen described the progress of the initiative at Regulatory Watch 2007, a conference held in September by the 

FDA launched the CMC pilot in July 2005 to evaluate the utility of comprehensive Quality Overall Summary as part of a new drug application (NDA)  and to implement new concepts such as QbD, design space, and real-time release contained in the International Conference on Harmonization's guidances, 

 and the FDA process analytical technology (PAT) guidance

Nine original new drug applications (NDAs) and two supplemental NDAs were accepted into the pilot program. As of Sept. 19,  2007, seven of these NDAs had been submitted, of which six were approved and one was under review. FDA expects to receive the remaining four NDAs in the next six months, with the goal of concluding the pilot by the end of 2008, says Chen. 

The pilot has allowed FDA and industry to work together to explore various ways to implement ICH Q8, ICH Q9, and FDA PAT guidances. 

 Chen began by outlining FDA's view of QbD. "QbD is a systematic approach to product and process design and development," she says. QbD involves the following key elements:   

Determine critical quality attributes (CQAs)

Link raw material attributes and process parameters to CQAs and perform risk assessment

Manage product life cycle, including continual improvement.

Chen then shared some observations made from the CMC pilot as they relate to CQAs, risk assessment, design space, and control strategy. The lessons learned from the CMC pilot are being considered in the revision of ICH Q8.  

 The revision of ICH Q8, or ICH Q8 (R1), is an annex to ICH Q8. It provides further clarification of key concepts outlined in the core guideline and describes the principles of QbD. Q8(R1) was signed off by the ICH Expert Working Group as a draft (or Step-2) guidance on Nov. 1, 2007, and will soon be published for public comment in each ICH region (Europe, Japan, and the United States). 

Chen described some observations on CQAs. These were:  

Most of the applications related CQAs to those attributes that have a direct impact on product quality, safety, and efficacy

Most applications included CQAs for the drug product, but only some applications included CQAs for the drug substance

Some applications considered the drug substance's property affecting downstream manufacturing as a CQA

Most applications related critical process parameters to CQAs

Most applications considered a process parameter noncritical if well controlled or well within the design space.

"A question arises on whether a process parameter may be considered noncritical if it is well controlled or well within the design space," says Chen. "This issue is being considered more fully in the revised ICH Q8," she says. 

Chen noted that several applications in the CMC pilot included risk assessments, especially for the drug product by linking input and process variables to CQAs. Tools used in the risk assessment included the Ishikawa or fishbone diagram, failure mode effect analysis (FMEA), and Pareto analysis. An Ishikawa or fishbone diagram is used to identify all potential variables, such as raw materials, compression parameters, and environmental factors, which can have an impact on a particular CQA, such as tablet hardness. A FMEA can then be used to rank the variables based on risk (i.e., a combination of probability, severity, and detectability) and to select the process parameters with higher risks for further studies to gain greater understanding of their effects on CQAs. The risk assessment is amassed by a multidisciplinary team based on prior knowledge and experiments.

"It is important to provide a systematic risk analysis of how raw materials, process steps, and process parameters affect product quality," says Chen. "One of the points to consider in risk assessment," she says  "is to provide an explanation when citing prior experience as the basis for assigning risk. The risk assessment that leads to the development of a comprehensive control strategy to reduce risk to product quality should be described, and the risk reduction and control should be discussed for changes that occur inside or outside the design space, " she says.

"Risk assessment can provide increased assurance to quality," emphasized Chen, because "process variability is identified and its linkage to product CQAs is understood; process and product controls reduce the impact of variability; and quality product will continue to be made when movement within the design space occurs in the future." 

A risk assessment also is important for effective communication between FDA and industry and for intracompany communication (such as between research/development and manufacturing and among multiple manufacturing sites),  says Chen. "And within FDA, risk assessment allows for a dialogue between pre-and post-marketing review functions and among review, compliance, and field inspection staffs."  

Chen also shared some observations from the CMC pilot for design space. "Most applications included a design space for the drug product, but only some included a design space for the drug substance," she says. Most of the applications included design spaces for process parameters, but only some included design spaces for formulation components (i.e., excipients and drug-substance) properties. Methods for determining design space included: one-variable-at-a-time experiments, statistically designed experiments, and modeling approaches. Methods for presenting design space included graphs (surface-response curves and contour plots), linear combination of parameter ranges, equations, and models.  

In establishing and presenting a design space, Chen identified certain key points to consider:  

Effect of formulation-component properties on process performance and product quality studied

Supportive mathematical models used, as appropriate 

Scale-up and equipment issues considered 

Effect of operation or site change considered

Uncertainty addressed with risk management. 

Control strategy also is a critical element of QbD, and Chen outlined some points for potential applications to consider when establishing a control strategy. "The control strategy should be comprehensive," she says, "and should include raw-material properties and intermediates, in-process controls, and specifications for the drug substance and drug product. It is also important that the strategy demonstrate control of excipient properties based on the understanding of their effects and not relying solely on compendial standards," she says.   

Better use of process knowledge and understanding in setting specifications

More meaningful sampling for drug-product testing

Experience needed in setting real-time release specifications. 

 Chen mentioned that both industry and FDA are "on a learning curve" as it relates to the acceptance criteria for real-time release. She pointed out, however, real-time release provides manufacturing flexibility and increased quality assurance and is a more modern approach to manufacturing and controls.  

"More scientific information was shared with FDA in the pilot NDAs," says Chen, and "elements of QbD were applied and risk-based regulatory decisions were enabled." She concluded that the pilot benefited FDA and industry in implementing QbD, although challenges (e.g., cultural change, knowledge, and resources) remain for both. 

Global Feature

Chi-wan Chen, deputy director of the Office of New Drug Quality Assessment (ONDQA) at the US Food and Drug Administration's Center for Drug Evaluation and Research, shares insight from FDA's pilot program that was designed to allow pharmaceutical companies to submit CMC information demonstrating application of quality by design.

PTSM: Pharmaceutical Technology Sourcing and Management-12-05-2007

Mixed Message for Contract Manufacturers

2007 Ends with a Drought in New Molecular Entities

2007: The Year in Review

A FDA Perspective on Quality by Design