Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

On Mar. 29, 2012, the Generic Pharmaceutical Association (GPhA) reiterated its call for Congress to move forward with user-fee proposals for generic drugs and biosimilar products.

“The generic industry has stepped up to do our part to help ensure US drug safety, establish a more level playing field among all participants in the US pharmaceutical supply chain, and significantly reduce the time needed to commercialize a generic drug,” said David Gaugh, GPhA vice-president for regulatory sciences in a GPhA 

 before the Senate Committee on Health, Education, Labor, and Pensions on Mar. 29, 2012, in support of generic-drug and biosimilar user-fee programs. “The [user-fee] programs will help assure that American consumers continue to receive the significant cost savings from generics that, over the past dozen years, have provided more than $1 trillion in savings to the nation’s healthcare system,” he said.

The proposed user-fee programs were developed last year through collaboration among GPhA, FDA, and other stakeholders. Under the Generic Drug User Fee Act (GDUFA), the generic-drug industry agreed to pay $299 million annually in user fees for the next five years, beginning Oct. 1, 2012. This funding is supplemental to what Congress appropriates to FDA each year and will enable FDA’s Office of Generic Drugs to hire additional scientific resources needed to provide timely approval of generic drugs. The new fees also will provide increased funding for generic-drug manufacturer facility inspections, noted GPhA in its statement.

In his testimony, Gaugh noted that, of the $299 million per year that FDA will receive over the five-year GDUFA program, 80% (or approximately $240 million) will come from finished-dose manufacturers, and the remaining 20% will be paid by API manufacturers. Thirty percent of the funding will stem from application fees, and 70% will be derived from fees on manufacturing sites or facility fees.

“Splitting the fees in this manner will provide the FDA with a predictable source of annual income, as the number of facilities manufacturing generic drugs on a yearly basis provides a more consistent figure than the number of generic drug applications submitted,” he said. “Finished dose facilities that manufacture both generic and brand medications will be required to pay both a Prescription Drug User Fee Act facility fee and a GDUFA facility fee.”

GDUFA also calls for performance goals for FDA. As part of these goals, GDUFA calls for the agency to complete, by the end of year five, the review of 90% of all generic-drug applications (i.e., abbreviated new drug applications [ANDAs]) for those ANDAs pending as of Oct. 1, 2012, the proposed starting date for the program. In addition, by the end of the program’s fifth year, GDUFA calls on FDA to review 90% of ANDAs within 10 months after they are submitted. In his testimony, Gaugh said more than 2700 generic-drug applications are awaiting approval from FDA’s Office of Generic Drugs, and the average approval time for an application is approximately 30 months.

GPhA also supports a proposed program that creates a separate review platform for biosimilar sponsors, to be financed annually through $20 million of the funds appropriated to FDA and supplemented by user fees equivalent to those under the Prescription Drug User Fee Act. A portion of the application fee paid during the biosimilar development phase will be used to support earlier resourcing for product reviews. Similar to GDUFA, the program also includes performance goals for FDA, which calls for the agency, by the end of the program’s fifth year, to review 90% of the original biosimilar applications it receives within 10 months of its submission.

Generic Drug and Biosimilar Users Fees Gain Traction

Articles

On Mar. 29, 2012, the Generic Pharmaceutical Association reiterated its call for Congress to move forward with user-fee proposals for generic drugs and biosimilar products.

GPhA Urges Congress to Move Ahead on Generic-Drug and Biosimilar User Fees

UNICEF and UNFPA, the United Nations Population Fund, launched a high-level commission late last month to improve access to essential health supplies for women and children in the developing world. The Commission on Life-Saving Commodities for Women and Children is seen as important tool in realizing the UN Millennium Development Goals (MDGs), a set of antipoverty, which include reduction of maternal and children mortality. 

“Making sure that women and children have the medicines and other supplies they need is critical for our push to achieve the MDGs,” said Secretary-General Ban Ki-moon, in a Mar. 23, 2012, World Health Organization press release. “The Commission will tackle an overlooked but vital aspect of health systems and ensure that women and children are protected from preventable causes of death and disease.” 

President Goodluck Jonathan of Nigeria and Prime Minister Jens Stoltenberg of Norway will serve as founding cochairs of the Commission on Life-Saving Commodities for Women and Children, which will also include global stakeholders from the public, private, and civil-society sectors. UNICEF Executive Director Anthony Lake and UNFPA Executive Director Babatunde Osotimehin are vice-chairs of the Commission, which is part of the United Nations Secretary-General’s Every Woman Every Child movement to support achievement of the health-related MDGs. The Every Woman Every Child Initiative was launched by UN Secretary-General Ban Ki-moon during the United Nations Millennium Development Goals Summit in September 2010. 

“There is no doubt that lives can be saved by increasing access to affordable and effective medicines and health supplies. We must all make a difference and the time is now,” said President Jonathan of Nigeria in the release. 

“The day of birth is the most dangerous day in the life of a woman and her child,” said Prime Minister Stoltenberg. “The fact that women do not get the care they need during childbirth is the most brutal expression of discrimination against women. To prevent these tragic and unnecessary deaths is not only a humanitarian urgency of highest priority, but a key investment for social and economic development.” 

 The Commission will identify strategies for improving the delivery of essential health supplies, including strengthening local production capacities, promoting new technologies and products, strengthening regulatory frameworks, and enhancing innovative financing mechanisms at both the global and local levels. 

 The Commission will focus on high-impact health supplies that can reduce the main causes of child and maternal deaths, as well as innovations that can be scaled up, including mechanisms for price reduction and supplies stability. Key efforts include: reducing financial barriers to access through social-protection mechanisms, such as fee waivers, vouchers, and social insurance, and global financial mechanisms, such as pooled procurement; creating incentives for international and local manufacturers to produce and innovatively package overlooked supplies; identifying fast-track regulatory activities to accelerate registration and reduce registration fees for a special list of products to encourage a focus on quality medicines. The Commission also will advocate to build consensus around priority actions for increasing the availability, affordability, access, and rational use of overlooked health supplies that will prevent premature death and disease among children under five years old and women of childbearing age. 

A new UN organization focuses on improving the delivery of essential health supplies, promoting new technologies and products, strengthening regulatory frameworks, and enhancing financing mechanisms.

UN Launches Commission on Life-Saving Commodities for Women and Children

Achieving a good return on assets through manufacturing-capacity utilization is an ongoing challenge for bio/pharmaceutical companies. Pharmaceutical companies need manufacturing capacity on hand to produce commercial products and also to launch new products as they come through their drug-development pipelines. The inherent uncertainty of drug development, however, makes it difficult to balance the need for timely access to manufacturing capacity with the interest of avoiding underutilizing capacity and a resulting reduction on a return on assets. This balancing act is particularly challenging with biologics manufacturing because the capital costs for manufacturing capacity are higher than traditional small-molecule drug-substance manufacturing. A long-term manufacturing capacity-sharing arrangement by Merck & Co. and MedImmune LLC, the biologics arm of AstraZeneca, established in September 2011, demonstrates a potential solution for the capacity challenges increasingly being faced by bio/pharmaceutical companies. 

Changing fundamentals for biologics manufacturing

The impetus for the companies’ manufacturing capacity-sharing agreement reflected larger trends in biopharmaceutical manufacturing. In the 1990s, many large pharmaceutical companies began building biologics manufacturing capacity in anticipation of advancing biologic-based drug candidates. At the same time, certain CMOs began to emerge to fill capacity requirements. As these changes occurred, during the 2000s, technology gains also started to significantly improve upstream yields, explained Michael Kamarck, president of Merck BioVentures. Kamarck spoke at the Drug, Chemical, and Associated Technologies Association (DCAT) Business Development Forum, 

Successfully Partnering PharmaceuticalManufacturing Throughout Product Lifecycle

, which was held in mid-March in New York.  Proprietary fermentation technology, for example, improved yields at the beginning of the decade from 0.5 to 1 g/L to 1–3 g/L in 2002, to 3–5 g/L in 2004 to 10 g/L in 2007. The confluence of increased manufacturing capacity that resulted from both improved technology and recently constructed greenfield biologic-based manufacturing facilities resulted in overcapacity on an industry level. “This evolution brought us to another chapter in biomanufacturing,” said Kamarck, pointing to strategic collaborations as a way to manage the capacity overflow and biomanufacturing needs. 

The genesis of the Merck–MedImmune collaboration

The fundamental changes in biomanufacturing trends came into play with the biologics manufacturing capacity-sharing arrangement made by Merck and MedImmune in September 2011. 

 In 2007, AstraZeneca completed the acquisition of MedImmune, which became the biologics arm of AstraZeneca, incorporating the MedImmune assets, legacy AstraZeneca biologics assets, and Cambridge Antibody Technology, which AstraZeneca had acquired in 2006.  A key manufacturing asset for MedImmune, which is headquartered in Gaithersburg, Maryland, is the company’s large-scale monoclonal antibody (mAb) manufacturing facility in Frederick, Maryland. Prior to its acquisition by AstraZeneca, in 2005, MedImmune committed to support 500 kilograms of production per year through the addition of two 15,000-L bioreactors, which would replace an original 2 x 2500 L plant. The additional capacity was intended to meet the mid-range product demand of MedImmune through 2013. In acquiring MedImmune in 2007, AstraZeneca further authorized an additional 500 kilograms of capacity to include a total of four 15,000-L bioreactor trains at the new Frederick facility.

When the MedImmune product for which the initial capacity was intended did not proceed through clinical development, MedImmune realized that existing products would not fill the site. The combination of a pipeline-delivery gap and the subsequent improvement in titres or grams-per-liter yields required an alternative solution to fill capacity. “This became the genesis of the concept for sharing capacity or selling it directly,” explained Andrew D. Skibo, executive vice-president of operations at MedImmune, who also spoke at the DCAT Business Development Forum. The business case for developing an alternative approach to utilizing capacity was clear, he said. Contrary to the original plan, the plant would not be fully utilized by MedImmune’s own pipeline until at least 2022 based on a three- to five-year delay in product commercialization and dramatically improved titres. In addition to the underutilization of the facility, the associated staff at the facility would be in standby status. “The skilled and trained staff was the highest value asset of concern,” said Skibo. “We wanted to retain key employees by getting them working in their area of expertise.”

With the motivation of covering operating expenses of staff and depreciation for the manufacturing assets, which was estimated at $100 million per year, the business case for developing a partnership for sharing capacity was made. In evaluating a potential partner, Skibo outlined that certain criteria came into play. The ideal situation would involve one or two partners with large-volume needs specific to needing capacity for mammalian cell culture (i.e., Chinese hamster ovary). The arrangement would require joint capacity planning in a long-term deal (i.e., 10 to 15 years).  In an arrangement, MedImmune capacity needs would prevail, and reciprocity with capacity in other areas, such as microbial bulk capacity, high-capacity mAb filling, and live-virus filling would also be part of any agreement. “This criteria would preclude a strictly CMO-type agreement from working,” explained Skibo. “This type of arrangement would require the right people and people ‘chemistry.’ It is more than a financial agreement; both parties would have ‘skin in the game,’” he said. 

Using those criteria, MedImmune selected Merck & Co. as its partner. The companies formed a 15-year manufacturing capacity-sharing agreement in September 2011 with Merck utilizing MedImmune’s Frederick, Maryland, facility for Merck bulk product manufacturing.The companies also are exploring the suitability of Merck’s facilities in the production of microbial-based compounds in MedImmune’s pipeline, and other potential manufacturing opportunities where business strategies intersect. Manufacturing began in the fourth quarter of 2011. The arrangement provides benefits to both parties. For MedImmune, the arrangement provides long-range utilization of excess capacity at the company’s Frederick facility while maintaining sufficient capacity for MedImmune’s own products. For Merck, the arrangement provides flexible and rapid access to capacity for the company’s maturing biologics pipeline, which includes biosimilar candidates. 

 Skibo points out that the deal represents a new model in pharmaceutical manufacturing, one based on “co-opetition,” a mindset that contains both cooperation and competition (1). A key consideration of a “co-opetition” model is that the players in the game of business include customers, suppliers, competitors as well as those that provide complementary rather than competing products and services. In the case of Merck and MedImmune, although both companies provide pharmaceutical products, there is no direct competition in the service being shared, namely biologics manufacturing capacity. The deal is structured to provide MedImmune and Merck a balance of lot cost versus production risk allocation that in combination is uniquely different than a typical CMO arrangement.  Lot cost is based upon MedImmune’s own internal fully absorbed lot production costs.  The risk associated with lot production reflects a traditional CMO assignment of risk.   Merck pays for any additional specialized resources and/or capital expansion upgrades as needed. The initial focus is on cell-based compounds for which Merck develops the process and analytics through medium scale, so any future changes are limited to fit and manufacturing needs only. MedImmune can provide large-scale technology transfer out of the Frederick facility as needed and can decline to work on any specific project. 

Since Merck and MedImmune announced their manufacturing-capacity arrangement, several other companies have partnered in biosimilars in a co-opetition-like or strategic partnership model. In February 2012, Biogen Idec and Samsung formed a joint venture, Samsung Bioepis to develop, manufacture, and market biosimilars in keeping with their agreement announced in December 2011. Under the agreement, Samsung is contributing $255 million of the $300 million for an 85% stake, and Biogen Idec is contributing $45 million for a 15% stake in the joint venture. The joint venture, which will be based in Korea, will contract with Biogen Idec and Samsung Biologics for technical development and manufacturing services. Samsung Biologics is a Samsung business formed in April 2011 to specialize in biopharmaceutical manufacturing. The joint venture will not pursue biosimilars of Biogen Idec's proprietary products. 

Amgen and Watson Pharmaceuticals formed a collaboration in December 2011to develop and commercialize, on a worldwide basis, several oncology antibody biosimilars. Under the agreement, Amgen will assume primary responsibility for developing, manufacturing, and initially commercializing the oncology antibody products.  Watson will contribute up to $400 million in codevelopment costs over the course of development, including the provision of development support, and will share product-development risks. In addition, Watson will contribute its expertise in the commercialization and marketing of products in specialty and generic-drug markets. The collaboration products are expected to be sold under a joint Amgen/Watson label.  Watson will initially receive royalties and sales milestones from product revenues. The collaboration will not pursue biosimilars of Amgen's proprietary products. 

Baxter and Momenta Pharmaceuticals also formed collaboration in December 2011 to develop and commercialize biosimilars. Baxter will provide its clinical- development and biologic manufacturing expertise while Momenta will provide its expertise in high-resolution analytics, characterization, and product and process development.

In looking ahead, Skibo observed, “Partnering to minimize investment risk will become commonplace in the future. It easier to justify a $600 million to $800 million investment when there is more than one pipeline to support, in addition to in-licensing, biosimilars, and novel products.”

The manufacturing capacity-sharing model in biologics between Merck & Co. and MedImmune LLC ushers in a new paradigm of co-opetition.

Manufacturing Capacity-Sharing Model: Merck & Co. and MedImmune LLC

Last month, the Indian patent authorities ruled that Bayer must grant a compulsory license to the generic-drug manufacturer Natco for Bayer’s anticancer therapy Nexavar (sorafenib), a drug to treat advanced kidney and liver cancer.  The judgment represents the first time the Indian Controller General of Patents, Designs and Trademarks has granted a compulsory license to a generic-drug manufacturer (1).

In its ruling, Indian patent authorities asserted that compulsory licensing, when a government allows a party other than the patent owner to produce a patented product or process without the consent of the patent owner, is permissible under  Indian patent law, patent laws of certain other nations, and  the World Trade Organization’s  (WHO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It acknowledged, however, that this case by which the applicant, Natco, sought a compulsory licensing under Indian patent law, was the first time such a case has been considered. 

In its ruling, Indian patent authorities noted that Bayer launched the drug worldwide in 2006, received regulatory authority to import and market the drug in India in 2008 and launched the product in 2009 in India. Natco, a generic-drug manufacturer based in Hyderabad, India, developed a process to manufacture the drug. It received approval for manufacturing the drug in bulk and marketing the drug in tablets from the Drug Controller General of India in April 2011. In its ruling, the Indian Controller General of Patents, Designs and Trademarks said that Natco had sought a voluntary license from Bayer to manufacture and sell the drug in India, but that had not materialized. Natco had sought to sell the drug for 8800 rupees ($178) for a month’s supply of a generic version of the drug compared with the 284,428 rupees ($5698) for a month’s supply sold by Bayer. 

In its decision, the Indian patent authorities asserted that a compulsory license may be granted if an invention is not available to the public at “reasonably affordable price.” The limited use of the drug in India, a delay by Bayer in bringing the drug to market in India, the lack of affordability of the drug to the public, the absence of local manufacture of the drug in India, and limited imports of the drug by Bayer into India were factors in the controller’s ruling that Bayer had not adequately “worked the invention” on a commercial level. Bayer had countered by asserting that price should reflect development costs not the public’s ability to pay for the drug. It further noted that a generic version of the drug is now being sold by the generic-drug manufacturer Cipla, an action that is the subject of a patent-infringement case between the two companies, which has impeded its ability to market the drug in India. 

Under the granting of the compulsory license, Natco must pay Bayer 6% of the net sales of the drug and sell it for 8800 rupees ($178) for a month’s supply of 120 tablets. Natco also must manufacture the drug at its own manufacturing facility and not outsource the production of the drug, and the drug must only be sold in India.

The Pharmaceutical Research and Manufacturers of America (PhRMA) weighed in on the issue of compulsory licensing. Although not specifically commenting on the specifics of the case, the association stated it did not favor the use of compulsory licenses. 

“While India has not routinely issued compulsory licenses (CL), PhRMA believes it is not an appropriate tool even if granting CLs may be a legal option,” said PhRMA President and CEO John Castellani, in a Mar. 14, 2012, statements. “Assessments of particular compulsory licensing policies and decisions need to be made on a case-by-case basis, taking into account a number of factors. Legitimate health emergencies that require making exceptions to intellectual property rights can and should be accommodated under the international framework, but only after exhausting all other efforts and under extraordinary circumstances.” 

PhRMA said it will not address the specifics of this case, but did offer a perspective on intellectual property rights. “One aspect that is particularly troublesome is the contention that ‘working’ a patent requires a company to manufacture within India. It is our firm belief that this is fully at odds with India’s TRIPS commitment (as well as its broader WTO obligations), and distorts what was intended as a public health exception into an industrial policy,” said Castellani, in the statement.

PhRMA also stressed the industry supports increasing access to medicines, but is against the use of compulsory licensing to achieve that objective. “The research-based pharmaceutical industry fully supports the objective of improving access to innovative medicines; however, CLs cannot solve India’s larger problems regarding access to medicines and healthcare. If countries begin to routinely use CLs, we could see a ‘race to the bottom’ in which governments in the developing world walk away from their responsibility to support research and innovation in public health. In the absence of the investment made by our members, and the resulting research and development, there would be no generic medicines for the world’s patients. The responsibility to promote development of new drugs lies with all countries, not solely those in the developed world.” 

1. G. Anand and R. Ahmed,  “Bayer Loses Drug Ruling in India,” 

The decision by the Indian patent authorities to issue a compulsory license for a generic version of a Bayer anticancer drug engenders debate.

Pharmaceutical Industry Faces Compulsory Licensing in India

's annual survey on spending and innovation trends for equipment and machinery showed a modest gain in spending overall in 2011. Equipment for solid-dosage manufacturing, biopharmaceutical production, and analytical instrumentation were the areas of strongest spending. Overall spending levels for 2012 are projected to be on par with 2011, and the United States and Western Europe will continue to be the targets of the majority of capital investment.  

 The survey showed a slight uptick in spending for equipment and machinery in 2011 compared with 2010. Almost 48% of respondents increased spending in 2011 (see Figure 1) compared with 43% in 2010 (1). One-third kept spending the same in 2011, and 18.5% decreased spending in 2011 (1) (see Figure 1). 

Figure 1: Spending on equipment and machinery in 2011 compared with 2010 levels (percentage of respondents). (SCOTT HEINER/INGRAM PUBLISHING/GREGOR SCHUSTER/GETTY IMAGES) 

For those respondents that increased spending, 60% increased spending by more than 4% compared with 2010 levels, and 40% raised expenditures more modestly, less than 4%. The survey showed:  

28.9% increased spending between 4.1% and 6.0% 

28.9% increased spending between 2.1% and 4.0%

10.5% increased spending between 0% to 2%. 

For those decreasing spending in 2011, 85% decreased spending by more than 8%, and 15% decreased spending by 4.0% or less.  

In looking at spending as percentage of annual sales, the survey showed:  

21% spent between 0% and 2% of their annual sales on equipment and machinery

21% spent between 2.1% and 4.0% of their annual sales 

23% spent between 4.1% and 6.0% of their annual sales

13% spent between 6.1% and 8.0% of their annual sales 

8.0% spent between 8.1% and 10.0% of their annual sales

14% spent more than 10% of their annual sales.

On an absolute level, half of the respondents spent less than $1 million on equipment and machinery, and one-third spent between $1 million and $50 million.   

. The survey results showed a modest gain in planned spending for equipment and machinery in 2012 compared with actual spending in 2011. Nearly half of respondents plan to increase spending in 2012  compared with nearly 48% of respondents who increased spending in 2011 (see Figures 1 and 2). As in 2011, one-third of respondents plan to decrease spending in 2012, and 17.2% plan to decrease spending in 2012 (see Figure 2). 

Figure 2:  Planned spending on equipment and machinery in 2012 compared with 2011 actual spending (percentage of respondents). (SCOTT HEINER/INGRAM PUBLISHING/GREGOR SCHUSTER/GETTY IMAGES) 

For those respondents that plan to augment expenditures on equipment and machinery in 2012, spending increases are expected to be higher than in 2011. Nearly three-fourths of respondents plan to increase spending by more than 4% compared with 2011 levels. In contrast, in 2011, 60% of survey respondents increased spending by more than 4%. For planned spending in 2012, the survey showed:  

14.3% plan to increase spending by more than 8%

25.7% plan to increase spending between 6.1% and 8.0%

34.3% plan to increased spending between 4.1% and 6.0%

20.0% plan to increased spending between 2.1% and 4.0%

5.7% plan to increased spending between 0% and 2.0%

For those planning to decrease expenditures in 2012, the declines were more evenly distributed than in 2011, when  85% of respondents decreased spending by more than 8%. For planned expenditures for 2012, the survey showed:  

8.3% plan to decrease spending between 0% and 2% 

16.7% plan to decrease spending between 2.1% and 4%  

8.3% plan to decrease spending between 4.1% and 6% 

33.3% plan to decrease spending between 6.1% and 8% 

33.3% plan to decrease spending by more than 8%.  

So how much do companies plan to spend on equipment and machinery in 2012? In looking at spending as percentage of annual sales, the survey showed:  

23.2% will spend between 0% and 2% of their annual sales on equipment and machinery

21.7% will spend between 2.1% and 4.0% of their annual sales 

31.9% will spend between 4.1% and 6.0% of their annual sales

7.2% will spend between 6.1% and 8.0% of their annual sales

10.1% will spend between 8.1% and 10.0% of their annual sales

5.8% will spend more than 10% of their annual sales.

On an absolute level, 38.8% of the respondents plan to spend less than $1 million on equipment and machinery in 2012. Almost one-third (31.3%) will spend between $1 million and $10 million, and 16.4% will spend between $11 million and $50 million.  

. In 2011, Western Europe and the United States were the two leading areas for capital investment. More than one-third (37.8%) of respondents said that their companies spent the most on equipment and machinery for facilities in Western Europe, and nearly one-third (32.0%) said their companies spent the most in the United States (including Puerto Rico).  

Established markets continue to dominate spending. Nearly half (47.3%) of respondents added machinery and equipment at facilities in the US in 2011, and 42.6% did so in Western Europe (see Figure 3). Eastern and Central Europe was the third leading region for spending with 18.9% adding equipment and machinery at facilities in those regions followed by Canada, with 10.1% adding equipment there (see Figure 3). Capital investment in emerging markets trailed, with 8.9% adding equipment, respectively in China and India, and 7.7% in Mexico, Central, or South America (see Figure 3). 

Figure 3: Percentage of respondents that added equipment and machinery in 2011 in various regions. (SCOTT HEINER/INGRAM PUBLISHING/GREGOR SCHUSTER/GETTY IMAGES) 

. Planned spending in 2012 is commensurate with 2011 levels in established markets and show some redistribution of expenditures in emerging markets. As in 2011, companies plan to spend the most in 2012 in Western Europe (37.7%), the US (35.1%), and Central and Eastern Europe (9.6%). As in 2011, the US, Western Europe, and Eastern or Central Europe are the three leading areas for planned capital investment in 2012. The survey showed 42.3% plan to add equipment and machinery at facilities in the US in 2012, 39.3% in Western Europe, and 12.8% in Eastern and Central Europe (see Figure 4).  

As in 2011, planned spending for 2012 is less in emerging markets than in established ones. In emerging markets, one interesting shift is slightly greater investment in China. In 2012, 11.1% of respondents plan to add equipment and machinery at facilities in China compared with 8.9% who added equipment there in 2011 (see Figures 3 and 4). More respondents also plan to add equipment and machinery in Mexico and in Central and South America. In 2012, 9.4% of respondents are augmenting investment in those areas compared to 7.7% in 2011. Also, slightly less (6.8%) plan to add equipment in India compared to 8.9% in 2011 (see Figures 3 and 4). 

Figure 4: Percentage of respondents that plan to add equipment and machinery in 2012 in various regions. (SCOTT HEINER/INGRAM PUBLISHING/GREGOR SCHUSTER/GETTY IMAGES) 

 The survey also examined the types of equipment and machinery purchased. Companies spent the most in 2011 on solid-dosage manufacturing equipment and machinery, with 35.6% of respondents reporting this area as the highest source of spending in 2011. Equipment for biologic-based API manufacturing and equipment for quality assurance/quality control (QA/QC) were tied for the next two leading areas, with 16.1% of respondents each spending the most in those two areas. Equipment for parenteral/sterile manufacturing was the next highest area of spend for 11.9% of respondents, and equipment for small-molecule API or chemical manufacturing was the next highest source of investment at 7.6%.

The survey showed that tablet presses, capsules-filling machines, equipment for biopharmaceutical production, and analytical instrumentation were areas of active spending in 2011. A specific breakdown showed (see Figure 5):  

46.1% increased spending for tablet presses or capsule-filling machines

45.5% increased spending for biopharmaceutical downstream production equipment

Pharmaceutical Technology's annual survey on equipment and machinery reveals the spending levels and type of spending made in 2011 and planned for 2012.

Navigating the Equipment and Machinery Market

Contract API manufacturers and fine-chemical producers gathered at Informex, the annual trade show of custom and batch manufacturers, in New Orleans in February. Companies used the show to highlight recent capacity and service expansions as well acquisitions. These investments reflect targeted moves to increase capacity in specialized areas, such as high-potency manufacturing, diversification into non-API areas, such as formulation development, finished product manufacturing, and testing, as well as partnering with other providers to broaden service offerings and capabilities.  

Several CMOs highlighted recent expansions in high-potency manufacturing. Aesica opened a new purpose-built $4.6-million high-potency manufacturing facility for the manufacture of formulated products and plans to upgrade its API manufacturing facilities to enable manufacture of high-potency APIs at commercial scale. The upgrade will allow Aesica to manufacture SafeBridge Category 3 APIs and formulated products from pilot to commercial scale from two of its sites in Europe. The new facilities will enable Aesica to manage high-potency API production at quantities from 1–200 kg. Further investment in API manufacturing capability in 2013 will equip Aesica to produce batch sizes up to 600 kg. 

Helsinn Advanced Synthesis reported on its cytotoxic and high-potency manufacturing facilities in Biasca, Switzerland, and multiyear expansions in this area. The company's capabilities include pilot-scale, small-scale, and commercial-scale capabilities for manufacturing highly potent APIs. Its cytotoxic capabilities include isolated and dedicated cytotoxic quality control and R&D laboratories, raw-materials and finished-goods warehousing, and finishing and sampling areas. A new laboratory has been constructed exclusively for small-scale cytotoxic production, design of experiment, and initial process development. The company also has pilot-scale, small-scale, and commercial-scale capabilities for manufacturing cytotoxic small molecules. 

Evonik recently opened a new laboratory at its site in Hanau, Germany, for highly potent APIs and expanded its cGMP capacity for highly potent APIs on a kilogram scale at its Tippecanoe facility in Lafayette, Indiana. The new laboratory allows Evonik to develop and optimize syntheses for highly potent APIs in Germany. At the US site, Evonik has similar laboratory installations, expanding capacity with a reactor volume for highly potent compounds totaling 170 m

Fermion has invested in a new high-potency facility capable of handling OEL Class V compounds. The company added 10 m

  of additional high-potency manufacturing capacity with reactors ranging in volume from 70 L to 1500 L. The construction of this facility began in mid-2011 and the finished plant was scheduled to come on line in March 2012. By the fall of 2012, additional improvements will allow hydrogenation reactions to be undertaken at the facility. 

Almac is doubling analytical capacity at its 240,000-ft

  North American headquarters in Souderton, Pennsylvania. The facility offers full-service, integrated clinical packaging, drug-supply management, and technology services to pharmaceutical and biotechnology clients. Almac's additional laboratory investment will include polymorph and salt screening and solid-form development. The new facility is also equipped with a bathless dissolution apparatus for comparative dissolution studies. 

In addition to API and chemical development services, Almac provides formulation development and solid-dosage manufacturing for clinical-trial materials and commercial manufacturing and related services. The company recently acquired two new pieces of encapsulation equipment for its North American headquarters in Souderton, Pennsylvania: the Bosch GKF 702 capsule filler with integrated KKE 1700 checkweigher. The Bosch cGMP-compliant system is able to produce 42,000 capsules per hour compared to the 2700–4500 output of Almac's current machine in the United States. Further capabilities of the new equipment include powder, pellet, tablet, and placebo fill as well as multifill. 

Asymchem Laboratories (Tianjin) reported on the opening its new large-scale manufacturing facility, Jilin Asymchem Laboratories, in Dunhua, Jilin province, China. Phase I completion of Dunhua's manufacturing facility included 5000–20,000 L vessels for cGMP manufacture of raw materials to intermediates. Phase II involved completion of a second module for a total capacity of 532 m

. This site offers manufacturing as a standalone service and also back-integration for internal downstream cGMP targets to be further processed in Asymchem's Tianjin 2 GMP facility. Phase III construction in Dunhua for a GMP API manufacturing plant is on schedule and is expected to be completed later this year. 

Some contract API manufacturers also recently expanded to support biopharmaceutical development and manufacturing. For example, SAFC reported on its recent $350-million acquisition of BioReliance, a provider of global biopharmaceutical testing services, from Avista Capital Partners. BioReliance provides biologic, specialized toxicology, and animal-health testing to pharmaceutical, biopharmaceutical, diagnostics, and other life-science companies.  

BioReliance employs more than 650 people and is headquartered in Rockville, Maryland, with additional operations in Glasgow and Stirling, Scotland, and sales offices in Tokyo, Japan, and Bangalore, India. The acquisition complements SAFC's industrial media position, and its CompoZr zinc finger nuclease technology is synergistic with BioReliance's toxicology and animal-health services operations for the development of new assays, cell lines, and animal models, according to the company. 

Carbogen Amcis recently acquired Creapharm Parenterals, a subsidiary of France-based Creapharm Group and a CDMO specializing in liquid, semisolid, and injectable aseptic dosage forms. Creapharm Parenterals employs 16 specialists and operates a GMP manufacturing site in Riom, France.  

Solvias and RohnerChem reported on their partnership for custom research and manufacturing services, which was announced in October 2011. The preferred but nonexclusive partnership provides services from route scouting to commercial manufacturing. Solvias brings expertise in chemical, analytical and solid-state development, and RohnerChem brings experience in scale-up and commercial-scale custom synthesis of complex, small-molecule fine chemicals and APIs. 

Key capabilities from Solvias include high-throughput screening methods, which have been used in asymmetric homogeneous catalysis, CX-couplings, racemate resolutions, carbonylations, hydroformylations, biocatalysis development, and various other transformations. Solvias' solid-state development group also is equipped to assist in developing crystallization processes, perform polymorphism studies, and provide guidance in the development of the best solid form for an API. After process optimization, which can be performed either at Solvias' or at RohnerChem's kilo laboratories, commercial quantities can be manufactured at RohnerChem facilities. 

In January, evocatal, a biocatalysis provider, and RohnerChem formed a strategic partnership in biocatalysis with evocatal providing its biocatalysis experitse and RohnerChem manufacturing expertise. 

BASF has opened an industrial biotechnology and microbiology research center in Tarrytown, New York. The company uses biotechnological methods to produce products such as vitamins, enzymes, pharmaceutical intermediates, and specialties for the personal care, food and feed industries. One focus of the research laboratory work is to develop more efficient and resource-conserving production processes. The use of metabolic engineering, or the targeted modification of metabolism, is used to enhance the efficiency of the microorganisms used in these production processes. The laboratory also will be used to develop bacterial biofilms. 

DSM reported on InnoSyn, a route-scouting service that supports R&D as well as implementation of economical and scalable routes. The service offering includes consulting, route scouting, biocatalyst/catalyst screening, prefeasibility studies, full feasibility studies, mini-plant campaigns, and support in transfer and implementation. Various technical packages are provided for biocatalysis, homogeneous catalysis, organic chemistry and process R&D and continuous chemistry (i.e., microreactor technology). 

Neuland Laboratories, a contract manufacturer of APIs, intermediates, and peptides, launched a new mobile app version of its GuarD project-management system. GuarD was developed to support customers' participation in project planning and real-time tracking. GuarD uses the principles of critical-chain project management, which emphasizes resource availability and flexibility to maintain project timelines. GuarD allows for a detailed project plan that is viewable in an online template to provide a customer progress of its project, information on the latest task updates, expected time of completion, and other information important to the project. 

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Contract API manufacturers and fine-chemical producers roll out capacity and service expansions.