Commitment Dilution Hindering Drug Development and Price Pressure Compromising Safety, Warns CPHI Panel
CPHI Worldwide, part of UBM Live’s Pharmaceutical Portfolio, has announced the findings of the final part (part iii) of its 2014 annual report at the 25th CPHI Worldwide in Paris. Three world-renowned experts — Hedley Rees, MD at PharmaFlow Ltd, Hendrik Baumann, CEO of Arevipharma and Lukas Utiger, President, DPx Fine Chemicals and Integrated Offering — each have examined the pharma industry, particularly from a supply chain and contract services perspective, providing analysis on how this market will adapt and grow.
Hedley Rees believes that one of the major problems that currently exists within the pharmaceutical development industry is that many biotechs and virtual companies are simply looking for an exit part way through development and larger companies are only looking to develop proven products, resulting in a severe ‘commitment dilution’ that is slowing down and hindering innovation.
Lukas Utiger has suggested there is currently an imbalance between supply and demand of manufacturing capability, which is resulting in unsustainable price pressure. Hendrik Baumann warns that increasing price pressures being experienced by API producers worldwide, if not addressed, will result in increasing GMP issues and threaten patient safety. As a result, he argues we are at the start of a split within the contract services sector, which ultimately will lead to European API producers concentrating on flexible delivery across multipurpose plants, with Asian facilities concentrating on single use facilities for low cost commodity type production.
For the industry to survive we will see increased consolidation and integration of services across larger CDMO players with Utiger predicting increased strategic partnerships between pharma and key CDMO providers. Ultimately, this will result in several CDMOs having more than 10% of drug product and substance market chain in as little as 3 years' time.
The use of outsourcing is also resulting in severe supply chain pressure and Hedley Rees foresees a continuation of the slow progress that has so far blighted government and regulatory proposals to appropriately tighten the commercial supply chain. Baumann added that this is creating an unfair playing field for API producers, particularly with regard to cGMP, environmental protection and sustainability. Furthermore, as a direct consequence of increasing use of tender business we are likely to see future shortages of popular drugs due to decreased warehouse capacity.
Rees has foreseen Big Pharma reacting to these supply chain issues with an increasing scrutinisation of CMC packages for potential licensing partners. Venture capitalists will seek to reduce risk by only targeting developers that can leverage ex-vivo and in-silico predictive screening methods. However, ultimately Hedley Rees argues that regulators are not the answer to underlying issues of poor practices within the development supply chain of drugs and the industry will realise that QbD is about engaging with end-users and involving stakeholders that have historically been held at arms length.
Finally, Baumann has seen increased innovation entering the market through western contract services development in response to pricing pressures. One innovation that will be crucial in developed markets is the use of microreactors, which allow for seamless up scaling of processes using parallelisation instead of batches.
Chris Kilbee, Group Director Pharma at CPHI said: “The final part of the 2014 CPHI annual report examined the perspectives of outsourcing and the supply chain across the pharmaceutical sector. As we can testify with the growth in total exhibitors at CPHI, the pharma supply chain is now hugely complex and diverse, and choosing the right partners and processes is critically important in any products’ viability. Our experts state that without proper controls and an appropriate plan to take the supply chain from the clinical trial to commercial scale there are serious risks. They recommend a number of measures to de-risk this process and with strategic partnerships clearly on the rise we see CPHI’s role in the industry as being ever more important than before. I would advise all of the attendees and the wider industry to download a (free) full copy of report. With our reports, CPHI is actively encouraging knowledge sharing and innovation across the industry, the future is very exciting and we believe these findings will help the pharma community to work better together.”
CPHI has made the full findings of its annual report available for download at:
http://l.cphi.com/annual-report2014
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