Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

Samsung and Biogen Idec agreed to invest $300 million to establish a joint venture to develop, manufacture, and market biosimilars. The deal is Samsung’s latest effort to strengthen its position in biosimilars.

Under the terms of the agreement, Samsung will contribute $255 million of the $300 million for an 85% stake, and Biogen Idec will contribute $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. Biogen will contribute expertise in protein engineering and biologics manufacturing. 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.

“The future of healthcare will continue to be driven by innovation, but it will also be about ensuring patients have access to cost-effective therapies, and biosimilars will play an important role in that," said George A. Scangos, CEO of Biogen Idec, in a 

. “This relationship will allow us to leverage our world-class protein engineering and biologics manufacturing capabilities while maintaining focus on our mission of discovering, developing, and delivering innovative therapies for patients worldwide with neurodegenerative diseases, hemophilia, and autoimmune disorders.”

Completion of the transaction is subject to customary closing conditions, including antitrust clearance by the US and Korean regulators. In February of this year, Samsung formed a new joint-venture company to provide biopharmaceutical contract manufacturing services in South Korea with the CRO Quintiles. Samsung owns 90% of the company, and Quintiles owns 10%. At the time, Samsung said it planned to commercialize biosimilars by 2016 and to expand into innovative biologics in the future. The joint-venture company plans to construct a biopharmaceutical manufacturing plant in South Korea and begin full-scale operations in April 2013.

Merck Sells Contract Biopharmaceutical Business to Fujifilm

Articles

Samsung and Biogen Idec agreed to invest $300 million to establish a joint venture to develop, manufacture, and market biosimilars. The deal is Samsung's latest effort to strengthen its position in biosimilars.

Biogen Idec, Samsung Form Biosimilars Joint Venture

The World Health Organization (WHO) issued a report late last month, which showed that increased access to HIV services and drugs resulted in a 15% decline in new infections during the past decade and a 22% decline in AIDS-related deaths in the last five years. “It has taken the world 10 years to achieve this level of momentum,” said Gottfried Hirnshcall, director of WHO’s HIV Department.,” in a Nov. 30, 2011, WHO press release. “There is now a real possibility of getting ahead of this epidemic. But this can only be achieved by both sustaining and accelerating this momentum over the next decade and beyond.” 

The WHO report noted that improved access to HIV testing services enabled 61% of pregnant women in eastern and southern Africa to receive counseling for HIV, up from 14% in 2005. Nearly half (48%) of pregnant women in need received effective medicines to prevent mother-to-child transmission of HIV in 2010. Antiretroviral therapy, which improves the health of infected people and also stops further transmission, is currently available for 6.65 million people in low- and middle-income countries, accounting for 47% of the 14.2 million people eligible to receive it. The improvement in health also has an improvement in economic development. The report says that investment in HIV services could lead to total gains up to $34 million by 2020 in increased economic activity and productivity, more than offsetting the cost of antiviral therapies. 

Despite these gains, however, the WHO report acknowledges that more needs to be done and continued investment in HIV services and drugs is required. “2011 has been a game-changing year,” said Paul De Lay, deputy executive director with UNAIDS, in the WHO release. “With new science, unprecedented political leadership, and continued progress in the AIDS response, countries have a window of opportunity to seize this momentum and take their responses to the next level. By investing wisely, countries can increase efficiencies, reduce costs, and improve on results. However, gains made to date are being threatened by a decline in resources for AIDS.” 

The report highlights certain key needs. More than half of the people who need antiviral therapy in low- and middle-income countries are still unable to access it or do not know if they are infected with HIV. Also, many countries are still not tailoring programs for at-risk groups, including adolescent girls. Worldwide, 64% of people aged 15-24 living with HIV are female. The rate is higher in Sub-Saharan Africa, where girls and women make up 71% of all young people living with HIV, according to the WHO analysis. The WHO report also points out that better services are needed to prevent mother-to-child transmission of HIV and to treat children. Only about one in four children in need of HIV treatment in low- and middle-income countries received it in 2010 as compared with one in two adults receiving treatment.  

At the end of 2010, 6.66 million people were receiving antiviral therapy in low- and middle-income countries, an increase of more than 1.4 million people, or 27% from December 2009. Overall, the estimated treatment coverage of antiviral therapies among adults and children in low- and middle-income countries continued to increase and was 47% of the 14.2 million people eligible for treatment at the end of 2010, up from 39% in December 2009. As of December 2010, 10 low- and middle-income countries, including three countries with generalized epidemics (Botswana, Nambia, and Rwanda) had already achieved universal access to therapy, defined as providing antiviral therapy to at least 80% of the people eligible for treatment. Seven additional countries, including two countries with generalized epidemics (Swaziland and Zambia) had estimated coverage levels between 70% and 90%.

On a regional basis, however, there are mixed signs for increased access to antiviral therapies. Sub-Saharan Africa recorded the largest overall increase, 30% in the number of people accessing antiviral therapies. The regional coverage rate for antiviral treatment  was 49% at the end of 2010 in Sub-Saharan Africa. It was 39% in Asia, 23% in Eastern Europe and Central Asia, only 10% in the Middle East and Africa, and 63% for adults and 39% for children in Latin America and the Caribbean.  

On the research front, there are approximately 88 medicines and vaccines in development to treat or prevent HIV/AIDS and related conditions, according to a recent report by the Pharmaceutical Research and Manufacturers of America (PhRMA). Of the 88 medicines and vaccines in development, 49 are antivirals and 27 are vaccines. These  medicines are either in clinical trials or awaiting review by FDA. The research efforts are focused in improving treatment regimes, more targeted therapies, and vaccines. The International AIDS Vaccine Initiative estimates that a vaccine that is 50%  effective and given to only 30% of the population could reduce new HIV infections by 24% over 15 years, according to the PhRMA report.

International efforts, including improving access to medicines, have contributed to stemming the rise of HIV/AIDS in the developing world.

World Health Organization Issues Progress Report on Combating HIV/AIDS

, a parasite found only in the Americas. Chagas disease is a neglected tropical disease that largely affects poor and rural populations. According to the US Centers for Disease Control and Prevention, as many as 11 million worldwide are affected with the disease. 

 initiative by awarding eight grants totaling $18.4 million to help communities and populations disproportionately affected by Type 2 diabetes. The grants will be used to develop solutions that integrate public health, healthcare services, and community supportive services to improve health outcomes and reduce disease burdens. The grants are part of an overall five-year $100 million initiative, 

Together on Diabetes: Communities Uniting to Meet America’s Diabetes Challenges

 awarded $2.34 million in grants to help prisoners with mental illness return to the community. The grants were made to the South Florida Behavioral Network and Valley Cities Counseling and Consultation in Washington. 

 is providing more than $4 million in additional funding to the 

Infectious Disease Research Institute (IDRI)

. The funding will allow IDRI to continue its early-phase drug-discovery efforts focused on identifying new and better therapies for treating tuberculosis, including multidrug-resistant tuberculosis. In addition, Lilly will provide more than $1 million in-kind for volunteer time from Lilly scientists and access to the company’s drug-discovery expertise, chemical libraries, and research tools. 

 contributed $12.3 million to the United Way, which represented contributions from the company’s US employees and retirees and a matching gift from the Lilly Foundation. The amount exceeded the company’s previous contribution of $12 million and was $800,000 above the 2011 donation goal.

International Federation of Pharmaceutical Manufacturers and Associations (IFPMA)

 highlighted two recent studies that provide global data on influenza vaccine provisions and the level of support for immunization policies. The IFPMA study published in the journal 

 measured seasonal influenza vaccine provisions worldwide and found coverage needs to continue to grow strongly to meet vaccination recommendations issued by public health authorities and organizations, such as the World Health Organization (WHO). The results showed that global vaccine supply increased by more than 70% to 449 million does during the study period (2004 to 2009), but only 20% of the 157 study countries reached the study’s low threshold level, which was based on WHO seasonal influenza immunization recommendations for the elderly only , not including other at-risk groups.  A second IFPMA study published in 

 showed that public health authorities around the world officially recommend and financially support seasonal influenza vaccination for healthcare workers. The IFPMA data surveyed 26 countries from each region of the world and showed that 88% of the countries recommended healthcare worker vaccination against seasonal influenza. 

, a global nonprofit healthcare group, to evaluate more than 30 promising technologies at various stages of development that address the two leading causes of maternal mortality, postpartum hemorrhage and preeclampsia, as well as family planning. The partnership, valued at $2.5 million, extends through the fall of 2012 and will integrate private- and public-sector expertise to evaluate affordable and easy-to-use maternal health technologies that work in resource-poor settings. The program is part of 

, a new 10-year, $500-million initiative focused on reducing maternal mortality caused by preventable complications of pregnancy and childbirth. 

 reported on progress in ending river blindness (i.e., onchocerciasis).  Merck is partnered with the Carter Center, founded by former President Jimmy Carter, through the center’s Onchocerciasis Elimination Program for the Americas (OEPA), which assists national ministries of health in six affected Latin American countries to conduct health education and distribute Merck’s Mectizan (ivermectin). At the 21st Inter-American Conference on Onchocerciasis, held in Bogota, Colombia, last month, public health officials announced that Colombia has eliminated river blindness from within its borders, making it the first Latin American country to reach that goal. Also, Guatemala and Mexico will end drug-treatment programs for the disease in 2012 and begin the three-year postmonitoring program, already completed by Colombia, and required by the World Health Organization, to certify elimination of the disease. In Latin America, river blindness historically has affected Guatemala, Mexico, Colombia, Ecuador, Brazil, and Venezuela. Starting  in 2012, approximately 80% of the half-million at risk will no longer be in need of treatment. Brazil and Venezuela will continue treatment in the hopes of interrupting transmission by the end of next year. 

Novartis Foundation for Sustainable Development

 held a symposium in early December to examine the impact of information and communication technology on democratization and development. The conference focused on the role of e-health applications in improving access to healthcare and in facilitating the achievement of the health-related objectives in the United Nations’ Millennium Development Goals. The symposium also discussed the role of social media platforms in the Arab Spring and the impact of mobile-phone penetration in African nations. 

 has received the 2011 Business Civic Leadership Center’s Corporate Citizenship Award in the Best International Ambassador category for Pfizer’s Global Health Partnership program. The awards honor excellence in corporate citizenship and civic leadership for initiatives in the United States and around the world. Pfizer’s Global Health Partnerships combines the philanthropic and in-kind resources of the Pfizer Foundation and Pfizer to combat noncommunicable diseases by strengthening healthcare systems and infrastructure toe support cancer- and tobacco-control efforts. 

 participated in the 10th Edition of the Pan-African Conference Against Malaria, which gathers the directors of 34 African National Malaria-Control Programs, representatives of the Global Fund to Fight Aids, Tuberculosis and Malaria, the World Health Organization, the Roll Back Malaria Partnership, and scientific experts. Speaking at the conference was Sanofi CEO Christopher A. Viehbacher, who discussed the value of private–public partnerships, nonprofit organizations, and public- and private-sector groups in combating the disease. Sanofi supplies several malaria drugs in support of malaria-control efforts and the health-related United Nations’ Millennium Development Goals. Key efforts by Sanofi include the Impact Malaria program to supply medicines and support healthcare education and information on malaria prevention and treatment, a partnership with the Drugs for Neglected Disease Initiative , a public–private partnership, which developed a fixed-dose combination drug to combat malaria, and various other research efforts for malaria treatment and prevention.. 

A roundup of developments in corporate social responsibility and sustainability from the bio/pharmaceutical industry, its suppliers, and other private and public organizations.

CSR and Sustainability in the News

Antibody drug conjugates represent a niche area of drug development. Antibody drug conjugates combine a small-molecule, often a cytotoxic compound, to a monoclonal antibody. Grant E. Boldt, PhD, director of European business development for SAFC, discusses manufacturing considerations in producing antibody drug conjugates with Patricia Van Arnum, executive editor of 

A podcast moderated by Patricia Van Arnum, executive editor of Pharmaceutical Technology.

Technical Perspectives: Antibody Drug Conjugates

The year 2011 was another year of transition for fine-chemical producers and contract manufacturers of APIs and intermediates. As the pharmaceutical industry as a whole deals with slowing growth, increased generic-drug incursion, reduced R&D productivity, and the financing pinch for smaller and emerging bio/pharmaceutical companies, so do its suppliers. Expansion activity among fine-chemical producers and contract API manufacturers was limited although certain areas, such as high-potency manufacturing, continue to attract investment as do biopharmaceutical manufacturing and related services.  

One of the noteworthy expansions in 2011 was the opening of Almac's new North American headquarters in Souderton, Pennsylvania, in May 2011. The completion of the two-year construction project and $120-million investment provides the company with parallel service offerings in the United States and in Europe through the company's Craigavon, Northern Ireland, site. The new 240,000-ft

  North American headquarters houses more than 800 employees. 

The new Souderton site integrates the company's clinical technologies and clinical services activities into one location after being housed in separate locations in Audubon and Yardley, Pennsylvania. Almac consists of five major units: Almac Clinical Services, Almac Clinical Technologies, Almac Sciences, Almac Pharma Sciences, and Almac Diagnostics. Almac Clinical Services provides clinical-supply services, such as comparator sourcing, blinding and overencapsulation, packaging and labeling of clinical-trial supplies, and distribution and depot activities. Clinical Technologies provides interactive voice and web-response systems and other similar support services. Almac Sciences provides custom-synthesis services and technology. Key functions include: API development and manufacturing, biocatalysis screening and selection, route selection, process development, solid-state chemistry services, and development and manufacture of custom peptides, oligonucletides, and proteins. Almac Pharma Services provides pharmaceutical development and drug-product manufacture for all phases of clinical trial supply (Phases 0–IV) and commercialization. Almac Diagnostics provides biomarkers for discovery and validation, bioinformatics, and genomic services.  

In October 2011, Almac announced that it is expanding its manufacturing capacity to over 30 m

  at its European headquarters in Craigavon. The upgraded facility will include reactor vessels, cleanroom product isolation, and drying equipment for highly potent API manufacturing up to 600-kg batch sizes. The company expects the facility to be built, commissioned and validated within the next two years. The company also is expanding its pharmaceutical development services capabilities with a new non-GMP formulation-development facility for the development and scale-up of solid oral dose products, including for high-potency compounds. 

In 2011, other companies reported expansions in high-potency manufacturing. Piramal Healthcare announced that it is performing commercial-scale antibody–drug conjugate (ADC) manufacturing at its Grangemouth, Scotland, facility. The company is currently evaluating plans to build out additional manufacturing suites to accommodate kilogram batch sizes. Several ADC-based therapies are in late-phase clinical trials, approximately one dozen are in Phase I development, and more than 20 are in preclinical development. Earlier this year, Piramal opened a new $400,000-quality-control laboratory suite at its facilities in Grangemouth to support its ADC portfolio.  

Outlook for global contract pharmaceutical manufacturing, research, and packaging 

Sigma-Aldrich's custom manufacturing and services business unit, SAFC, recently completed an assessment by SafeBridge Consultants and has been granted SafeBridge certification for its commercial-scale high-potency API facility in Verona, Wisconsin. Constructed at a cost of $30 million and officially opened in April 2010, the Verona site was built specifically to support manufacturing for Phase III and commercial scales up to Category IV compounds. The SafeBridge assessment also included a successful recertification of SAFC's nearby Madison, Wisconsin, high-potency facility. 

Also in 2010, SAFC completed an expansion of its Jerusalem, Israel facility, which increased SAFC's contract manufacturing capabilities in large-molecule recombinant proteins and small-molecule APIs through fermentation, including high-potent APIs and secondary metabolites. The expansion focused on niche fermentation of APIs and bulk drugs, secondary metabolites, cytotoxins, and large-molecule proteins. 

In October 2011, Saltigo reported that it will build new production capacities for potent APIs at its facility in Redmond, Washington. The company will expand its production to produce and handle Category III substances. Capacity up to the kilogram range will become available at the beginning of 2012. 

Aescia recently invested in a new high-containment facility in Queenborough, United Kingdom. Separately, the company also purchased three manufacturing sites in Germany and Italy from the biopharmaceutical company UCB as announced in late 2010. Aesica acquired sites in Monheim and Zwickau, Germany, as well as UCB's Pianezza, Italy site.  

In September 2011, Alphora completed the expansion of a cytotoxics R&D laboratory as part of an ongoing $4-million capital program for 2011. The 2011 capital program also includes other additions to R&D, GMP operations, analytical services and staffing. The new laboratory is designed to handle high-potency APIs and Class IV compounds. Other parts of the capital plan include the construction of a fourth cGMP kilo laboratory, a 10,000-ft

  GMP warehouse, and a new enterprise resource planning system, all of which are expected to be completed in the fourth quarter of this year. Expansion of a second pilot plant is planned for 2012.  

Lonza is investing CHF 24 million ($26.2 million) to expand cytotoxic manufacturing capabilities at its fine-chemicals facilities in Visp, Switzerland. The investment will add multikilogram-scale cytotoxic capacity for clinical and commercial production. Lonza currently operates high potency GMP laboratory suites on a gram scale. The expansion is expected to be completed in the second quarter of 2012.  

Lonza also is investing CHF 10 million ($10.9 million) to expand its biopharmaceutical development services platform in Singapore. The expansion includes the addition of 1858 m

  of laboratory space and associated equipment and will support cell-line construction, upstream and downstream process development, and analytical services. The facility is expected to come on line in the first half of 2012.  

In March 2011, Lonza announced it was investing £16 million ($25.3 million) to further develop the flexibility and capability of its Slough, UK biopharmaceutical manufacturing facility with the construction of a new 60,000-ft

  building adjacent to existing buildings to create a Slough campus. The investment includes a new fermentation suite, new purification suites, new process-development laboratories, and a new GMP warehouse. The project is scheduled for completion by the end of 2012. 

In May 2011, Lonza announced an expansion of its viral-based therapeutics business with the construction of a new, cGMP cleanroom located adjacent to its existing Houston, Texas, operations. The expansion provides for large-scale capacity to support late-stage viral vaccine and gene therapy projects. Lonza announced entering the viral manufacturing business through the acquisition of Vivante GMP Solutions in August 2010. 

Other firms are making select investments. Hikal has started construction of a new, multipurpose, multiproduct API manufacturing facility, which is scheduled to be operational by June 2012. The plant will consist of two parallel streams and will accommodate 32 reactors with capacities ranging from 6 m

  for a total reactor volume of approximately 300 m

. The custom manufacturing arm of Dr. Reddy's Laboratories expanded its Chirotech Technology Center at Cambridge Science Park, UK. In April 2011, the company opened a new 33,000-ft

 facility for laboratories and offices. The facility will support the company's capabilities in biocatalysis and chemocatalysis, activated mPEGs, and peptides. 

This year also saw some merger and acquisition (M&A) activity, primarily bolt-on acquisitions by select providers, some acquisitions by private-equity investors, reorganizations by other companies, and the emergence of new names in contract biopharmaceutical manufacturing.  

Evonik Industries reorganized by combining its business in custom manufacturing of APIs (exclusive synthesis), pharmaceutical amino acids (the Rexim product line), and pharmaceutical polymers in a new healthcare business line, effective Sept. 1, 2011. The newly formed business line is part of the Health and Nutrition Business Unit. Earlier this year, Evonik increased its capacity by 50% to make pharmaceutical-grade glycine at its plant in Nanning, China. 

Earlier this year, Johnson Matthey completed the integration of the biocatalyst offerings from X-Zyme, which the company acquired in July 2010. Johnson Matthey expanded the biocatalyst offerings into product and service offerings into its catalysis and chiral technologies business. The portfolio from X-Zyme includes enzymatic catalysts for scalable production of highly pure chiral amines and alcohols. The biocatalysts and related technology complement the chemocatalytic technology and related expertise of Johnson Matthey. 

Granules India, a pharmaceutical manufacturer, and Ajinomoto OmniChem, a producer of fine chemicals, formed a joint-venture, Granules–OmniChem, to provide APIs and intermediates. Granules OmniChem is constructing a new facility in Vishakhapatnam (Vizag), Andhra Pradesh, India. The construction of the facility was scheduled to begin by November 2011 and is expected to be completed by late 2012 with production beginning by January 2013. The company will initially focus on high-value, low-volume APIs and intermediates for existing customers and will custom manufacture new chemical entities in the future. 

CABB, a fine- and specialty-chemicals company, acquired the fine-chemicals company KemFine Group Oy through its Swiss subsidiary, for an undisclosed sum. In October 2011, Barclays Private Equity agreed to acquire CU Chemie Uetikon, a fine-chemical producer based in Lahr, Germany. 

Carbogen Amcis restructured its Swiss operations in Bubendorf, Aarau, and Hunzenschwil. Under the restructuring plan, the Aarau site will focus more strongly on development and the Hunzenschwil site on the pilot production of early-phase projects. Large-volume production and the manufacturing of highly active agents will continue at the Bubendorf site. The company planned to reduce headcount by 60 employees. 

On the biopharmaceutical front, earlier this year, Genzyme completed the sale of its pharmaceutical intermediates business to International Chemical Investors Group (ICIG). ICIG purchased substantially all of the pharmaceutical intermediates business, excluding the drug-delivery technologies portion. The acquired business was renamed Corden Pharma Switzerland and operates as part of ICIG's pharmaceutical business within the Corden Pharma group platform of companies. In September 2011, ICIG also acquired the former Boulder, Colorado, operations of Roche, which manufactures APIs, peptides, and small molecules. The operations are now named Corden Pharma Colorado.  

Fujifilm Diosynth Biotechnologies, the former Merck Biomanufacturing Network, began operations under its new name following the completion of the acquisition of the Merck Biomanufacturing Network by Fujifilm in April 2011. Fujifilm Diosynth Biotechnologies provides contract biologics development and manufacturing services. The acquisition included facilities in Research Triangle Park, North Carolina, and Billingham, UK, manufacturing contracts, business-support operations, and a workforce.  

In June 2011, Fujifilm and Mitsubishi formed a partnership for contract manufacturing for biopharmaceuticals. Under the partnership, the companies signed an agreement to transfer the ownership of 20% equity interests in Fujifilm's wholly owned biopharmaceutical contract manufacturing subsidiaries, Fujifilm Diosynth Biotechnologies U.S.A. and Fujifilm Diosynth Biotechnologies UK to Mitsubishi.  

Also, in 2011, Johnson & Johnson acquired the biopharmaceutical and biomanufacturing firm, Crucell. Following the acquisition, Crucell operates as the center for vaccines within the Johnson & Johnson pharmaceuticals group. 

 485 Route One South, Bldg F, First Floor, Iselin, NJ 08830 tel. 732.346.3072, 

Expansion activity was limited as fine-chemical producers and CMOs of API and intermediates grapple with changing industry fundamentals.

Contract API Manufacturing: The Year in Review

Simply put, 2011 was a year of transition for bio/pharmaceutical companies, contract manufacturers, and suppliers. Financial pressures caused by generic-drug incursion, the pressing need to augment R&D productivity and control costs, and an increasingly global and complex supply chain are some of the key issues cited by executives participating in 

industry roundtable. We asked executives to share their views of the leading issues shaping the bio/pharmaceutical industry overall and manufacturing and supply specifically. Participating in the roundtable were: Jeffrey Lee Craig, global director of marketing and business development at ATMI, a provider of single-use bioprocessing systems; Karen Zak, vice-president of marketing, pharmaceuticals, at the excipient and performance materials company Avantor Performance Materials; Guy Villax, CEO of the CMO Hovione ; Michael Kleinrock, research director at the IMS Institute for Healthcare Informatics; and John Kelly, vice-president of strategy and transitioning sites for Pfizer Global Supply (see Figure 1).  

Figure 1: From left, Jeffrey Lee Craig, global director of marketing and business development at ATMI; Karen Zak, vice-president of marketing, pharmaceuticals, at Avantor Performance Materials; Guy Villax, CEO of Hovione; Michael Kleinrock, research director at the IMS Institute for Healthcare Informatics; and John Kelly, vice-president of strategy and transitioning sites for Pfizer Global Supply. 

Reviewing 2011, what would you identify as the most significant issues shaping the bio/pharmaceutical industry?  

Key products continued to lose patent exclusivity. Research pipelines have become more robust as new medicines to treat unmet medical needs  are developed and approved. Emerging-market demand continued to redefine geographic boundaries and increased the complexity of global supply chains. These significant factors will continue to inform the industry's transition away from the blockbuster model and toward developing smaller volume, specialty products.  

 One of the most significant issues, by far, is the policy-driven actions that imposed additional costs to manufacturers or cut prices on medicines. These were largely motivated by fiscal and debt issues and impacted markets across the world. 

Second is the unprecedented number of patent expirations that took place in 2011, which are driving the growth of generic drugs. We [IMS Institute for Healthcare Informatics] expect to see future spending on generic drugs coming from increased competition and incentives as patents on innovative products expire. The US will see the largest expansion of generic-drug spending compared with other global developed markets. US generic-drug spending is anticipated to be 7–8% through 2015. 

 The increased speed and severity of regulatory activity reached a crescendo in 2011—Warning Letters, import alerts, recalls, and consent decrees. Some of it was clear evidence of global medicine agencies acting to recover control over the generic-drug  industry whose lightning-speed development and globalization has caught regulators off guard. Take for example, an EU inspectorate report leading to a FDA Warning Letter.  

The intensity of outsourcing by innovator-drug companies also is a significant trend, and here the most notable stories are in line with regulatory actions: a string of Warning Letters hitting Big Pharma because of their Indian-based supply chains. As one industry executive noted at a recent conference, 'A firm can have all the SOPs [standard operating procedures], systems, and controls required, but without [a] quality culture, product quality and business continuity are not assured.' Expect customers to be looking for evidence of a true quality culture across the organization and at every level. 

 During 2011, the pharmaceutical industry has shown a renewed emphasis on all aspects of security and overall quality throughout an increasingly more complex supply chain. Global supply-chain security initiatives are critical tools to prevent what has become an abundance of counterfeit pharmaceutical raw materials and therapeutics found in both developed and emerging markets. They also play an important part in addressing concerns about potential adulteration for economic gain, contamination, theft, and lack of appropriate regulatory compliance. With patient safety as the public's fundamental expectation of the industry, pharmaceutical companies have made supply-chain security a primary responsibility that applies across the organizational boundaries of procurement, manufacturing, packaging, and regulatory compliance. Collaboration within the industry across suppliers and manufacturers allows for the determination, sharing, and implementation of best practices that will continue to enhance supply-chain security and build patient confidence. 

In 2011, we noticed a continued push toward gains in manufacturing efficiency. In recent years, manufacturers have qualified and validated single-use technologies to accelerate milestones and address productivity demands. Currently, we are focused on scaling manufacturing processes and optimizing supply-chain infrastructure. Right now, single-use technologies are in the early stages of industrialization. The cycle of innovation is ongoing even as single-use products and systems are being integrated for more efficient manufacturing platforms. Many positive steps were made in 2011 to help solve efficiency challenges. Ultimately, a new approach to manufacturing will be realized through these new technologies.   

 Looking back at 2011, what would you identify as the most significant issues shaping the direction of bio/pharmaceutical manufacturing from a supply perspective, technical perspective, and/or regulatory perspective? 

 Issues shaping the direction of pharmaceutical manufacturing include: continuing to align capacity with future anticipated demand, ensuring the security of the supply chain, and meeting shifting global market requirements.  

 The current drug-shortages issue in the United States is of increasing concern to patients, clinicians, and policymakers. The issue is reflective of the challenges associated with complex sterile injectables and the supply chain; they were the genesis of a recent report by the IMS Institute where we identified several new trends and found significant volatility in the suppliers of drugs, but not always in the total volume of medicines. These issues will not get any easier as we approach 2012. 

 The most significant fact is that pharmaceutical manufacturers are operating in a time of continuous change. They are facing an extraordinary range of challenges, from handling risk-management initiatives while maximizing their manufacturing, outsourcing, and quality capabilities, to balancing the need for speed in technical problem resolution, all with the emphasis placed on supply-chain security.  They are facing these challenges while dealing with the intricacies associated with the development of new products and their components, along with the responsibility to provide an uninterrupted supply of safe and secure pharmaceuticals to the global patient population. In response to these challenges, cost management and operational excellence projects abound, including the development of enhanced collaborations internally between R&D and manufacturing as well as the use of external partnerships to meet strategic goals.  

 The direction of the industry is being shaped by the drive to meet tomorrow's manufacturing demands efficiently. Even as single-use vessels, mixers, bioreactors, and manifolds have become reliable, GMP manufacturing standards, innovation, adoption, and continuous improvement of disposable platforms are ongoing. Today, the focus is shifting from evaluation and integration to other considerations, including assurance of supply-chain security, the evolution of single-use standards and continuous technology, and efficiency improvement. 

: Looking ahead to 2012, what factors, conditions, or other developments do you think will play an important role in determining the performance and direction of the pharmaceutical industry overall and manufacturing specifically? 

 Pharmaceutical manufacturers will need to ensure that their internal and external manufacturing capabilities are aligned for the expected needs of the emerging new-product pipeline.  They must have the strategic flexibility and agility to respond to a more dynamic market environment and increasingly volatile product demand. In the emerging markets, manufacturers will need to look to partnership relations as opportunities for capturing competitive advantage.   

 The performance of the drug pipeline, both in the approval of new entities and in the commercial success of those medicines, will be critical for the long-term health of the sector and for the patients these medicines treat. For generic-drug makers, an unprecedented bubble in new molecular opportunities comes also with an unprecedented race to the bottom and the margin pressures that await. 

 Looking ahead to 2012 and onward, I see regulators adding new legislative powers to enable them to effectively control the new global industry landscape and establish effective oversight process. As the 

into national laws in 27 EU member states, we should expect shock waves to the supply chains of APIs in the generic-drug industry. We will witness a push toward higher standards and increased compliance. If there is increased demand from the few reliably compliant sources, this may trigger shortages, which may lead to API price increases although this is unlikely to translate into pharmacy-level price increases. The key dates are July 2013 for Europe and 2017 in the US, by which time, we shall have parity between foreign and domestic inspections in two of the major global regions. Japan may be less in the news, but Japan's Pharmaceuticals and Medical Devices Agency (PDMA) does expect the Japanese Drug Master File (J-DMF ) to mirror in detail the reality of what goes on in the plant and for the inspectors to verify compliance in the field against the Japanese version of the document; in fact, this is the only document they consider valid. Expect surprises. 

 The following challenges faced in 2011 within the pharmaceutical industry will continue as we move into 2012:    

The need for flexibility and adaptability within the manufacturing environment will continue, driven by the emphasis on cost containment and efficiencies.  

The use of external resources and locally situated partnerships will grow as a means to enhance presence in global/emerging markets. 

The ability to participate in these emerging markets will depend on the capability to have small, batch operations that can cost-effectively produce finished products locally.

There is a growing need for an ongoing comprehensive approach to resolving supply-chain security issues as they evolve around the globe.  

Uncertainty surrounding the sub-optimal performance of the global economy will continue to influence business decisions. 

Manufacturers will continue to contend with an environment of intense regulatory scrutiny, which will tighten on all aspects of the very complex supply chain.

 Our view of the biopharmaceutical industry is shaped by early development and ongoing growth in the single-use manufacturing technology space. We are beyond trial and validation of these technologies. Once the question was: 'Will these tools work?' Now, the expectation is to deliver on the efficiency and performance promises of lower operating costs, faster build of manufacturing capacity, and product life-cycle flexibility. These expectations have hit stride in the recombinant protein and vaccine arenas and are expanding into the fast-emerging stem-cell and cell-therapy markets. In 2012, the speed at which pharmaceutical and biopharmaceutical organizations achieve strategic clinical milestones and maintain economically viable business models will be differentiators. Suppliers of single-use technologies will be measured by their ability to excel in commercialization and industrialization and their cycle of technology innovation, supply-chain security, and continued improvement of process efficiency. 

Drug shortages, supply-chain security, generic-drug incursion, and flexible manufacturing models are some of the issues shaping the bio/pharma industry.