OR WAIT 15 SECS
Volume 23, Issue 9
The increasing cost of crucial manufacturing input factors, such as energy and raw materials, has been a severe threat to several companies.
How has the recent financial climate, coupled with rising energy costs, affected the market and prices of APIs?
The increasing cost of crucial manufacturing input factors, such as energy, raw materials and labour, have been a severe threat to less competitive producers. Many producers have had to reduce their base costs and increase their prices, which has made the market even more competitive. The increasingly volatile business environment has also led pharma companies to seek strong and sustainable partners.
In our experience, customers have clearly understood the need for price increases as they depend very much on the reliability and flexibility of a good producer. In the rapid upswing following the financial crisis, many producers were unable to scale up their production fast enough to cope with the sudden growth in demand. At our company, we collaborated with customers to optimise product flow and stock levels globally.
What implications do the emerging markets offer to Western API providers?
Pharma companies have expressed strategic interest in building their positions in emerging markets. We consider the emerging market as very important locations and drivers for business development. During the financial crisis, the dip in the emerging markets was much lower than that in the more established regions, and they were also the first ones back on the growth track. There is a rapidly growing demand in the emerging markets for APIs, however, and companies will need to ensure that they have sizeable capacities that can keep up with the demand.
We expect the growth in these regions to continue and we have expanded our presence accordingly. These regions are important for both the growth of our established products and new, innovative products.
When working in a well-established part of the API market how challenging is it to remain innovative and competitive?
Competitiveness is key in the market for well-established APIs. At our company, our strategy us to focus on the portfolio of APIs were we have a leading position in terms of size and cost position. For example, we are the world leader for Ibuprofene and we continue to optimise and expand our production in Bishop (US) to stay ahead of the competition in terms of quality and cost.
We have also developed products that help our customers to reduce their manufacturing costs. Our Ibuprofen DC85, for example, is a direct compressible formulation that allows for very high speeds in tabletting processes.
What common API problems continue to plague pharmaceutical manufacturers?
The solubility and, hence, bioavailability of APIs — particularly new APIs — is an increasing industry problem for many reasons including:
In many cases, the formulation has to bring a high dosage of the drug to increase its bioavailability, which can lead to unreliable efficacy, an increase in costs and stability problems.
For many years, the industry has conducted research and development into new excipients in order to help overcome the above issues. Today, a wide range of solubilisers and solvents are available. One technology that has gained significant interest is hot melt extrusion (HME). Although this technique has been used in the plastics and food industries for decades, it is relatively new in the pharmaceutical industry and only a few drug products are currently available on the market. The technology shows numerous benefits over traditional/classical methods including shorter processing times because of continuous downstream processes, environmental advantages due to elimination of solvents, and increased efficiency in drug delivery.
Looking ahead five years for now, how do you see the market for APIs evolving?
The market for APIs continues to grow above the overall pharma market because of the trend towards generics in both the established and emerging markets. For pharma companies, we will see ongoing consolidation and a stronger focus on the emerging markets, which are experiencing high-growth rates because of their increased expenditure on healthcare.
Suppliers and pharma companies will have to address the specific needs of the consumers in this regions with specially tailored products and new solutions that serve these markets in a cost-competitive way. To meet this challenges, it can be beneficial for companies to partner with global suppliers that help them to both reduce costs and cope with the unique challenges posed by emerging markets, such as local regulatory requirements and the fluctuations that are often seen in demand. Indeed, because of the rising complexity of business in the pharma landscape, selecting the right API supplier is becoming ever-more important.