A Changing Path in Global Sourcing

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Pharmaceutical Technology, Pharmaceutical Technology-03-02-2008, Volume 32, Issue 3

The European Union's REACH initiative has the potential to affect the flow of chemicals into the pharmaceutical suppy chain.

The sourcing of active pharmaceutical ingredients (APIs) and intermediates is an international affair. Much attention has been focused on using offshore sites for pharmaceutical manufacturing to secure low-cost production. Although this approach certainly remains an important issue, regulatory concerns are dominating the headlines in global sourcing. For 2008, the implementation of the REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) regulation, a new European Union policy on chemicals and their safe use, looms large.

The terms of REACH

REACH came into force in the EU on June 1, 2007, with the goal of establishing a uniform system for assessing the risk posed by new and existing chemicals (See sidebar, "Basic elements of REACH").

REACH requires EU-based manufacturers and EU-based importers doing business, directly or indirectly in Europe, to register chemicals and their uses with the newly created European Chemicals Agency (see sidebar, "REACH and the European Chemicals Agency"). Companies will eventually be required to provide toxicity data for substances produced or imported into the EU in quantities above 1 metric ton per year. Companies will also be required to submit a comprehensive risk assessment, called a chemical safety report, covering the various uses of the materials they register. For approximately 1500–2000 chemical substances, companies will have to go through an authorization process to get permission to continue to use those substances (1).

Patricia Van Arnum

The aim of REACH is to create a single system for "existing" and "new" substances. Substances are classified as non-phase-in substances (those not produced or marketed prior to the entry into force of REACH) and phase-in substances [substances listed in the European Inventory of Existing Chemical Substances (EINECS) or those that have been manufactured in the EU, but not marketed, in the past 15 years]. Approximately 30,000 phase-in substances (excluding intermediates) are expected to be registered during REACH's 11-year implementation.

Manufacturers and suppliers are facing the first critical phase in REACH implementation. Preregistration is from June 1, 2008, to Dec.1, 2008. To preregister an existing compound, the name of the compound, the Chemical Abstract Service (CAS) number, the EINECS number, the name and address of the registrant, and the tonnage must be reported to the European Chemicals Agency in Helsinki (1).

Compliance with REACHis an important consideration for chemical manufacturers and suppliers, including those that supply the pharmaceutical industry. "The major concern is that many in the industry do not know what the requirements are. The regulations are very complex, and the guidance provided by the EU has done little in the way of making the requirements for companies easier to understand," says Tucker Helmes, senior director of the Visions Department of the Synthetic Organic Chemical Manufacturers Association (SOCMA). SOCMAis the US-based trade association representing custom and batch manufacturers, including contract manufacturers of APIs and intermediates.

"There is also concern about the quality and number of staffers in Helsinki. The European Chemicals Agency is far from fully staffed, and there is concern that it won't be ready in time for preregistration," says Helmes.


REACH and the European Chemicals Agency

Another point for consideration is whether pharmaceutical ingredients are exempt from REACH. The REACH regulation exempts substances used in medicinal products that fall within the scope of Regulation 726/2004 (centralized procedures), Directive 2001/82/EC (veterinary use), and Directive 2001/83/EC (human use). The REACH regulation, however, does not clearly state whether the exemption applies to ingredients before they are incorporated into finished pharmaceutical products. Therefore, there is some uncertainty as to what extent pharmaceutical ingredients (such as APIs, excipients, and intermediates) are subject to REACH. The European Commission plans to review those exemptions in Annexes IVand V of the REACH regulation by June 2008.

Nonisolated intermediates are exempt. On-site isolated intermediates and transported isolated intermediates are subject to lesser registration requirements. Also, substances used for product- and process-oriented research and development may be exempted from registration for certain time periods (1, 2).

"My understanding is that finished pharmaceutical products are exempt from REACH registration. Makers of APIs or intermediates that are sold to US drug manufacturers only should not have an obligation. It would be a worry only for APIs or intermediates sold directly into the EU," says Helmes.

Basic elements of the REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) regulation

Under REACH, EU-based manufacturers and EU-based importers will need to obtain information on the substances they manufacture or import to assess the risks and to ensure that the risks are properly managed (1). Registration documents the execution of this responsibility. Manufacturers and importers must submit a technical dossier for substances in quantities of 1 metric ton or more and a chemical safety report for substances in quantities of 10 metric tons or more (1). REACH provides transitional periods for registering phase-in substances, provided the substance is preregistered.

Impact on the supply chain

Industry members point to the potential impact that REACH may have on the chemical supply chain. "We believe the flow of products in general from the United States to Europe may decline because of REACH," says Helmes. "Manufacturers and suppliers may decide it's not worth the expense or hassle of trying to get them through the process for REACH compliance. US-based contract manufactures exporting to the EU will have the burden of REACH compliance unless their customers or importers want to take that on," he says.

The cost and time for implementing REACH, however, may also provide a benefit for US-based contract manufacturers supplying European drug makers. "A trend may be created for drugs currently manufactured in Europe to instead, now be manufactured in the US and then sold into Europe because of the need to register APIs and intermediates in REACH," explains Helmes. "This is a possible opportunity for US drug makers in the short term," he says.

SOCMA provides REACH assistance

To help its members understand compliance, SOCMA's ChemSortia program offers REACH assistance through its REACH partners. These partners provide "only representative" and other services related to REACH-compliance needs such as preparation of registration dossiers, read across, and representation to the European Chemicals Agency, explains Helmes.

"ChemSortia builds on over 30 years managing chemical-specific consortia and panels for the Toxic Substances Control Act Section 4 test rules, High Production Volume testing, and related programs," says Helmes. "In this way, ChemSortia offers services to manage REACH cost-sharing consortia among suppliers, common manufacturers, supply-chain actors, and other organizations needing to share data, testing, dossier preparation, registration packages, submissions, construction of exposure scenarios, risk assessments, and preparation of chemical safety reports."

SOCMA is preparing a guidance manual for its members and will elaborate on the guidance through a series of webinars.

Beyond REACH

Outside of REACH, SOCMAsupports a North American program for the risk characterization of chemicals.

"SOCMA is committed to the Security and Prosperity Partnership (i.e., Montebello Agreement)," says Helmes. "In this way, we will support efforts to gather and evaluate data on medium production volume chemicals, which are those produced at levels greater than 25,000 pounds per year but less than 1 million," he explains.

"This is a cooperative agreement to pursue a tiered, targeted, and risk-based approach to chemical risk management that SOCMA considers is a significant step forward to continue the innovation of new and safer chemicals in North America," he adds.

One of the fundamental goals of this project will be publicly available risk characterizations of all chemicals in commerce produced and imported at more than 25,000 pounds annually. The project will build on current work, such as the US High Production Volume Chemical Challenge, a voluntary testing partnership between the Environmental Protection Agency, the Environmental Defense, the chemical industry, and work under Canada's Chemical Management Plan.

"We strongly support a system that begins with a screening-level look at chemicals and focuses on where more refined studies may need to be conducted, rather than just testing everything for the sake of data collection," says Helmes.

Patricia Van Arnum is a senior editor at Pharmaceutical Technology, 485 Route One South, Bldg F, first floor, Iselin, NJ, 08830, tel. 732.346.3072, pvanarnum@advanstar.com


1 Environment Directorate General, European Commission, "REACH in Brief," (Brussels, Belgium, October 2007).

2 European Chemicals Agency, Guidance for Downstream Users (Helsinki, Finland, January 2008).