Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

The end of a year is a time for reflection and in reviewing 2011, what were the issues of greatest importance to pharmaceutical manufacturers? We posed that question to executives in the pharmaceutical industry (see "Views from Pharma Leaders") and several important themes emerged: a move away from the industry's traditional blockbuster drug-development model to smaller volume, specialty products; increased generic-drug incursion; and a resulting need for more flexible internal and external manufacturing approaches in an effort to keep product supply in line with demand. At the same time, the pharmaceutical industry continues to see potential in emerging markets, greater complexity in the global pharmaceutical supply chain, and the attendant need for supply-chain integrity and security measures that maintain product quality amidst that globalization.  

As the pharmaceutical industry faces these challenges, it also faces an even more daunting task: improving its product-development model. Earlier this year, John C. Lechleiter, chairman, president and CEO of Eli Lilly, spoke to this challenge. "Ironically, the crisis in our innovation model comes at a time when we have vastly more scientific knowledge and data than ever before," he said in a speech on Mar. 9, 2011, before the US/Japan Business Council. "But unless we change the way we do research, we won't translate this knowledge into advances for patients. In the face of diminishing results, we can't simply perform the same old rituals and hope for a different outcome. We must truly 'reinvent invention.'" 

In the end, the ability of the pharmaceutical industry to collectively and as individual companies to "reinvent invention" will be the underlying measure of its success in 2012 and beyond. 

Articles

As 2011 comes to a close, a new paradigm of product development is ever more important.

Reinventing Invention

The Society of Chemical Manufacturers and Affiliates (SOCMA) issued a statement to the US Senate Committee on Environment and Public Works supporting the evaluation of national chemical-control laws but specifically opposing the Safe Chemicals Act, which was introduced earlier this year by Sen. Frank Lautenberg (D-NJ). Lautenberg had initially introduced the legislation in 2010 but re-introduced the bill in April 2011 following some changes, including a plan for risk prioritization. The bill seeks to reform the Toxic Substances Control Act (TSCA). TSCA was enacted in 1976 to provide the US Environmental Protection Agency (EPA) with authority to require reporting, recordkeeping, testing requirements, and restrictions relating to chemical substances or mixtures. The Senate bill seeks to address EPA's limitations in exercising its authority and implementing measures under TSCA. A summary of the bill, introduced in April 2011, may be found 

SOCMA issued its statement as part of a jointly held legislative hearing on TSCA before the full Senate Committee on Environment and Public Works, chaired by Sen. Barbara Boxer (D-CA), and the Subcommittee on Superfund, Toxics, and Environmental Health, chaired by Lautenberg. "The bottom line is this: this legislation establishes a strong, but practical system for guaranteeing the safety of chemicals, many of which end up in our bodies and the bodies of our children," said Lautenberg in a Nov. 17, 2011, 

. "And we remain open to other ways of achieving our shared goal of a system that improves safety and encourages continued innovation and growth in the chemical industry. But we must act on this issue soon."

Although SOCMA concurs with modernizing measures under TSCA, it opposes specific measures in the proposed legislation. "There is broad stakeholder agreement that TSCA needs to be modernized, but the Safe Chemicals Act is not workable,” said SOCMA President Lawrence D. Sloan, in a Nov. 17, 2011 SOCMA 

. "It fails to adequately consider its impact on innovation or balance chemical safety with continued manufacturing in the US. Ultimately, the Safe Chemicals Act will have to consider how the costs and delays associated with increased data submission will impact US jobs. Right now, there has been insufficient discussion about this important issue."

In its statement, SOCMA stressed that EPA’s current new chemicals program be maintained. It also raised concerns regarding data submissions for new chemicals. "....The minimum data set requirement is a one-size-fits-all approach that is unnecessary and would result in delays in getting low-risk chemicals to market," said SOCMA in its statement. “The Committee and Subcommittee should look closely at EPA’s protective modeling tools, which have proven to be highly predictive of risk, along with some of EPA’s recent enhancements to its existing chemicals program. The Committee and Subcommittee should also seek to understand how much health effects data the Agency already has in its files and the amount of data maintained elsewhere that EPA can leverage." SOCMA also voiced is disagreement with the bill’s prioritization process. 

"SOCMA appreciates the continued effort to keep this issue on the forefront, but remains concerned by widespread misinformation being a driver," it said in its press release. "In order for a bipartisan bill to advance, Congress should avoid dismantling the aspects of TSCA that have worked well."

SOCMA Issues Statement to US Senate Subcommittee on TSCA Reform

SOCMA Raises Concerns about Toxic-Substances Reform Bill

The Society of Chemical Manufacturers and Affiliates issued a statement to the US Senate Committee on Environment and Public Works supporting the evaluation of national chemical-control laws but specifically opposing the Safe Chemicals Act, which was introduced earlier this year by Sen. Frank Lautenberg (D-NJ).

SOCMA Raises Concern Over Proposed Legislation for TSCA Reform

Merck & Co. highlighted the key developments in its late-stage pipeline and its near-term plans for regulatory filings. The company has 19 candidates in Phase III clinical trials and plans to submit eight new US regulatory filings in 2012–2013, including five new drug candidates.

The five new drugs targeted by Merck for US regulatory submission are Tredaptive (extended-release niacin and laropiprant) for treating atherosclerosis, suvorexant for treating insomnia, odanacatib for treating osteoporosis, V503 (a cervical-cancer vaccine), and Bridion (sugammadex) for reversing neuromuscular blockade. Overall, the company’s late-stage pipeline consists of 32 Phase II and Phase III candidates, which include new molecular entities and combination drugs.

The company also described six other promising candidates. Anacetrapib is a reversible and selective cholesterol ester transfer protein inhibitor in Phase III development. MK-3102 is a once-weekly oral dipeptidyl peptidase-4 inhibitor candidate for treating Type II diabetes that is expected to enter Phase III clinical trials in 2012. V212 is an inactivated varicella-zoster virus vaccine in Phase III development for preventing herpes zoster. MK-3222 is an anti-interleukin-23 monoclonal antibody candidate for treating psoriasis that is expected to enter Phase III clinical trials in 2012. MK-5172 is an oral pan-genotypic NS3/4a protease inhibitor for treating hepatitis C, and MK-8931 is a β-site amyloid precursor protein-cleaving enzyme for treating Alzheimer's disease that is expected to enter Phase II development in 2012.

In addition to its innovator drug program, Merck will continue to advance its biosimilars portfolio for “specific opportunities where the company can be a first mover upon patent expiry of the originator product,” according to a Nov. 10, 2011, 

Merck & Co. Outlines Progress in Its Late-Stage Pipeline

The Society of Chemical Manufacturers and Affiliates (SOCMA) issued a statement to support a recently introduced bill intended to help the federal government deal with market-access barriers more effectively. The bill, HR 3112, the Trade Law Enforcement Act, was introduced by Rep. Michael Turner (R-OH) on Oct. 6, 2011. The bill would formalize the process by which the Office of the United States Trade Representative (USTR) acts on market-access barriers that are deemed unlawful under US trade agreements.

“This bill elevates a process already in place for companies to report the unfair practices they are experiencing for investigation,” said SOCMA in a Nov. 3, 2011, 

. “Formalizing the process allows companies to understand the resources that exist within the government, which often they do not know exist. In a time when businesses are looking more at new opportunities to export abroad to growing markets, having a resource such as this to ensure that companies can take full advantage of opportunities and agreements we have in place is extremely important.”

Under current law, the USTR has the ability to respond to various trade practices deemed unfair, including market-access problems caused by nontariff barriers. SOCMA says that while US manufacturers can petition the USTR to take action, they seldom do, partly because of the cost of compiling an adequate petition and the uncertainty of getting timely relief.

SOCMA is urging other members of Congress to show their support for the legislation. SOCMA is the US-based trade association representing custom and batch manufacturers, including producers of fine chemicals, pharmaceutical intermediates, and APIs.

The Society of Chemical Manufacturers and Affiliates issued a statement to support a recently introduced bill that it says will allow the federal government to more effectively deal with market-access barriers.

SOCMA Lends Support for Measures Addressing Nontariff Barriers

One measure of international efforts to reduce maternal and child mortality relate to the United Nations (UN) Millennium Development Goals (MDGs). First agreed at the UN Millennium Summit in September 2000, the eight MDGs set worldwide objectives for reducing extreme poverty and hunger, improving health and education, empowering women, and ensuring environmental sustainability by 2015. MDG four and five specifically relate to improving maternal and child health and reducing maternal and child mortality. At the UN MDG Summit in September 2010, world leaders reaffirmed their commitment to the goals and called for intensified collective action and the expansion of successful approaches. For example, a Global Strategy for Women’s and Children’s Health was launched and garnered over $40 billion in commitments. But despite this progress, more work is needed to meet the MDGs by 2015.

“Already the MDGs have helped lift millions of people out of poverty, save countless children’s lives and ensure
 that they attend school, said UN Secretary-General Ban Ki-moon said, in a July 7, 2011, press release. “They have reduced maternal deaths, expanded opportunities for women, increased access to clean water, and freed many people from deadly and debilitating disease. At the same time, the report shows that we still have a long way to go in empowering women and girls, promoting sustainable development, and protecting the most vulnerable from the devastating effects of multiple crises, be they conflicts, natural disasters or volatility in prices for food and energy.”

Some key points of progress is that the world as a whole is still on track to reach the poverty-reduction target, and by 2015, the global poverty rate should fall below 15%, well under the 23% target despite setbacks from recent economic, food, and energy crises. Some of the poorest countries have made the greatest strides in education. For example, Burundi, Rwanda, Samoa, Sao Tome and Principe, Togo, and Tanzania have achieved or are nearing the goal of universal primary education. The number of deaths of children under the age of five declined from 12.4 million in 1990 to 8.1 million in 2009, which means nearly 12,000 fewer children die each day. Increased funding and intensive control efforts have cut deaths from malaria by 20% worldwide from nearly 985,000 in 2000 to 781,000 in 2009. New HIV infections have declined steadily. In 2009, some 2.6 million people were newly infected with HIV, a 21% drop since 1997, when new infections peaked.  The number of people receiving antiretroviral therapy for HIV or AIDS increased 13-fold from 2004 to 2009, due to increased funding and expanded programs. An estimated 1.1 billion people in urban areas and 723 million people in rural areas gained access to an improved drinking water source during the period 1990–2008.

Despite these successes, more progress is needed. “Progress tends to bypass those who are lowest on the economic ladder or are otherwise disadvantaged because of their sex, age, disability or ethnicity,” said Ban in the UN statement.  “And disparities between urban and rural areas remain daunting.”

The report shows that the poorest children have made the slowest progress in terms of improved nutrition and survival. In 2009, nearly a quarter of children in the developing world were underweight, with the poorest children most affected. Children from the poorest households in the developing world have more than twice the risk of dying before their fifth birthday as children in the richest households.  Being poor, female, or living in a conflict zone increases the probability that a child will be out of school, the report says. Worldwide, among children of primary school age not enrolled in school, 42%, or 28 million, live in poor countries affected by conflict. While stressing that achieving the MDGs largely depends on ensuring women’s empowerment and equal opportunities for women and men, girls and boys, the report also shows that achieving this goal remains elusive. The report finds that opportunities for full and productive employment remain particularly slim for women. Following significant job losses in 2008–2009, the growth in employment that occurred during the economic recovery in 2010, especially in the developing world, was lower for women than for men.

In May 2011, the Global Strategy for Women and Children’s Health announced new commitments by 16 countries:  Burundi, Chad, the Central African Republic, Comoros, Guinea, Kyrgyzstan, the Lao People's Democratic Republic, Madagascar, Mongolia, Myanmar, Papua New Guinea, Sao Tome and Principe, Senegal, Tajikistan, Togo, and Vietnam. Nine of these 16 countries represent the African continent. These commitments come in addition to the 18 made in September 2010 by African states, bringing the total of African countries having committed to the health of women and children to 27. These commitments to the Global Strategy follow a declaration by heads of states at the 2010 July Summit of the African Union to strengthen efforts to improve maternal, newborn, and child health and a March 2011 Resolution by African ministers of finance and budget to improve health investment and strengthen their dialogue with health counterparts. 

'”The Global Strategy is an unprecedented opportunity to help the women and children who need it most. The commitments made by Members States, donors and other partners are an impressive signal that we collectively take responsibility to achieve the health-related Millennium Development Goals and save more women's and children's lives,'” said World Health Organization Director-General Dr. Margaret Chan, in a May 19, 2011, statement. 

Every year, 358,000 women in the developing world aged 15–49 die of pregnancy and childbirth-related complications. Every year, 2.6 million children are stillborn, and a further 8.1 million die before their fifth birthday, including 3.3 million babies in the first month of life. “Focusing on the women and children in greatest need is not only the right thing to do, it moves us faster and most cost-effectively towards meeting the health Millennium Development Goals,” said Anthony Lake, UNICEF executive director, in the May 19th statement. “By choosing to redouble their efforts on maternal and child health, these 16 nations are not only saving lives, they are making an investment in their future.” 

The commitments, made with the support of UNAIDS, UNFPA UNICEF, the World Bank and WHO (collectively known as the H4+ agencies), focus on measures proven effective in preventing deaths, such as increased contraceptive use, attended childbirth, improved access to emergency obstetric care, prevention of mother to child transmission of HIV, and childhood immunizations. 


 In September 2011, Merck & Co. announced the launch of "Merck for Mothers," a long-term effort with global health partners to prevent women from dying from complications of pregnancy and childbirth. The launch includes a 10-year, half-billion-dollar initiative that applies Merck's scientific and business expertise to make solutions more widely available, develop technologies, and improve public awareness, policy efforts, and private-sector engagement for maternal mortality.

 “Every Woman Every Child has shown what can be achieved through close cooperation among the UN, governments, and the private sector," said UN Secretary-General Ban, in a Sept. 20, 2011, Merck press release. "A great deal has been achieved in the last year, but progress must be accelerated if we are to achieve our goals of saving 16 million lives by 2015. I am delighted that despite difficult economic times, many governments, companies, and civil-society leaders are making significant commitments to Every Woman Every Child. These are smart decisions [that] visionary leaders recognize the value of investing in the health of women and children."

In September 2010, UN Secretary-General Ban launched the Global Strategy for Women's and Children's Health supported by Every Woman Every Child, a global effort to improve the health of women and children. Merck, in concert with the UN and its partners, has committed to help tackle the MDG that aims to reduce the maternal mortality ratio by 75% and create universal access to reproductive health.

Based on input from more than 100 experts in the field, Merck developed a strategic framework identifying where the company will focus its people and resources in the Merck for Mothers initiative. The initiative will focus on the two leading causes of maternal mortality (excessive and uncontrolled bleeding after childbirth, known as post-partum hemorrhage, and life-threatening high blood pressure during pregnancy, known as preeclampsia) as well as family planning, which is known to play an important role in reducing maternal mortality. The initiative will be guided by input from both an internal steering committee and an external advisory board. Merck will hold itself accountable for the initiative's programs and outcomes by ensuring that an independent organization will monitor and evaluate its efforts. There are three main approaches for the long-term initiative. 

The first approach is to accelerate access to proven solutions. Merck intends to improve the quality and supply of diagnostic, prevention, and treatment interventions for post-partum hemorrhage and preeclampsia. In addition, the company will strengthen medical education for skilled birth attendants, help develop sustainable models for health deliver, and expand access to family planning.

The company’s second strategy is product Innovation. Merck will collaborate with partners to develop maternal health technologies for widespread use in resource-poor settings. Merck will start with an assessment of more than 30 promising existing technologies in partnership with leading donors, nongovernmental organizations (NGOs), and researchers, with a goal of developing at least three innovations that address post-partum hemorrhage, preeclampsia, and family planning.

The company’s last effort focuses on global awareness and advocacy. Merck will join maternal-health experts to create greater public awareness of the need to reduce maternal deaths in an effort to improve global and national policy. Merck also will work with NGOs and multilateral organizations to advocate for broad private-sector engagement. As part of "Merck for Mothers", Merck is among the first companies to join the UN Global Compact/UN Foundation's Private Sector Task Force for Every Woman Every Child. 

Pharmaceutical companies join international efforts to reduce maternal and child mortality in the developing world.

Pharma Companies Focus on Advancing Women

The pharmaceutical industry is undergoing a transition that is marked by evolving product demand, generic-drug incursion, a greater emphasis on specialty products, and an intensification in product development for biologic-based drugs. Industry growth patterns are shifting not only on a product basis, but on a geographic basis as well. Pharmaceutical companies are seeking to meet rising demand in emerging markets and face a more global and complex supply chain, both on an ingredient basis and on a finished-product level. John Kelly, vice-president of strategy and transitioning sites for Pfizer Global Supply (PGS), recently discussed these trends and Pfizer’s manufacturing and supply strategy to address the changing marketplace.

John Kelly, vice-president of strategy and transitioning sites for Pfizer Global Supply

“Our mission is to have an integrated internal and external supply network to provide a competitive advantage for Pfizer by offering fast, flexible, and innovative supply solutions,” says Kelly. That task involves aligning the company’s supply network, consisting of both external and internal partners, with changing product demand, as well as integrating the former Wyeth network with Pfizer’s supply network following Pfizer’s $68-billion acquisition of Wyeth in 2009. 

Pfizer has 87 manufacturing sites across all business sectors—pharmaceuticals, consumer healthcare, and animal-health care. This supply network includes 188 logistics centers, more than 500 supply partners, and more than 30,000 employees. On a geographic basis, the company has 30 sites in North America, 20 in Europe, seven in China, 17 in the rest of Asia, and seven in Latin America. On the pharmaceutical side, the company operates six small-molecule manufacturing sites, six biologic-based drug sites (five for drug substances and one for packaging), eight solid-dosage facilities, and four sterile-manufacturing sites. Additionally, the company operates six manufacturing sites for its consumer-healthcare business and 23 for its animal-health business.

 Kelly explains that the company’s supply network is focused on four main strategies: to optimize its supply network, optimize its network performance, increase commercial value, and enhance core process excellence. In building a cohesive strategy, Kelly points out that PGS has developed a co-manufacturing approach by combining and consolidating global operations, not only through its most recent acquisition of Wyeth in 2009, but through earlier large-scale acquisitions, namely Warner-Lambert in 2000 and Pharmacia in 2003, as well as through bolt-on acquisitions, with some recent examples being the animal-health care company Synbiotics in 2010, the specialty pharmaceutical company King Pharmaceuticals in 2011, and the consumer-healthcare business of Ferrosan, which the company announced earlier this year that it will acquire. 

With respect to its goal of optimizing its supply network, Kelly emphasizes that PGS’s strategy is to optimize internal and external partnerships in sourcing, capacity, capital allocation, costs, and asset utilization. Pfizer uses external partners for approximately 30% of its production on a cost-of-goods-sold basis, which includes API manufacturing and finished-product manufacturing. “External manufacturing is of increasing importance as we look at different ways to supply products,” says Kelly. 

In its goal of optimizing network performance and enhancing process excellence, the company measures and seeks continuous improvement in its manufacturing operations and supply-chain activities. The company recently adopted a balanced-scorecard approach for evaluating and improving the performance of its manufacturing network. The metrics from the balanced scorecard are applied on a site-specific basis and divisional level to assess PGS’s performance on processes, quality, and environmental, health, and safety compliance. PGS rolled out the balanced-scorecard approach in part in 2010, and this year is rolling it out fully across its network. 

“It helps us understand the progress we are making and how we are improving in several areas, such as how we serve our customers, how we meet our financial commitments, how we engage our colleagues, and how we improve our processes,” says Kelly. 

As part of its strategy to increase commercial value, the company focuses on developing and maintaining partnerships with the company’s business units to support innovation across the product life cycle, drive revenue creation and enhancement, and optimize supply-chain security. From an organizational perspective, PGS operates nine operating units, seven that support Pfizer business units and two that are responsible for managing external supply and transitioning sites. The PGS operating units support business units in specialty care, primary care, oncology, emerging markets, established products, animal health, consumer healthcare, and nutrition. The functions of these units and PGS operating units that focus on external supply and transitioning sites are supported by global logistics and supply activities, quality operations, global manufacturing services, and network-enabling functions, such as finance, human resources, legal, and procurement. 

 Kelly emphasizes that the company’s supply strategy is shaped by various factors affecting the industry. “The product mix is changing,” says Kelly. “We see shifts not only in small molecules versus large molecules, but see the need to address supply challenges caused by the changing blockbuster model and a move to smaller-volume products.” 

As part of those changes in product demand, as well as part of it integration with Wyeth, Pfizer announced plans to exit 13 sites during the next several years.The timing of specific exits will depend upon the complexity of operations, the amount of time needed for product transfers, and other business requirements.  Earlier this year, Pfizer sold its manufacturing plant at Dun Laoghaire, Ireland to Amgen. The 37,000-m

 aseptic operations facility has freeze-dried product and liquid vial-filling operations. Pfizer sold its bulk biologics facility in Shanbally, Ireland, to the biopharmaceutical company BioMarin. Pfizer also recently sold its consumer healthcare manufacturing facility in Richmond, Virginia, to Fareva, a pharmaceutical and consumer-products company, which will continue to supply Pfizer with product from the facility. 

 Pfizer's strategy includes plans to discontinue operations at three solid-dosage sites in Caguas, Puerto Rico; Loughbeg, Ireland; and Rouses Point, New York. Pfizer also announced plans to phase out pharmaceutical solid-dosage manufacturing in Guayama, Puerto Rico, but that site will expand its consumer-healthcare operations. Reductions are planned at two other solid-dosage facilities in Illertissen, Germany, and Newbridge, Ireland. Two aseptic facilities that make sterile injectable medicines were targeted for exit: Dublin, Ireland, (recently sold to Amgen), and Carolina, Puerto Rico. 

Pfizer also announced changes to its biopharmaceutical-manufacturing network. The company said it planned to exit operations in Shanbally, Ireland (recently sold to BioMarin), and Pearl River, New York. The Pearl River site, however, will remain Pfizer's center of excellence for vaccine R&D. Biotechnology plants in Sanford, North Carolina, Andover, Massachusetts, and Havant, United Kingdom, are expected to see reductions. Pfizer reported plans to cease production of consumer-healthcare products at its plant in Richmond, Virginia (sale of the facility to Fareva was recently completed), but consumer healthcare R&D operations will continue in the downtown Richmond site. 

Most recently, Pfizer announced plans to exit solid-dosage sites in St. Petersburg, Florida, and Bristol, Tennessee, as well as an animal-health diagnostic manufacturing site in Lyon, France.

In outlining the changes to its manufacturing network, Pfizer summarized how its transformed manufacturing network will look. Pfizer's solid-dosage network will include plants in Freiburg, Germany; Amboise, France; Vega Baja and Barceloneta, Puerto Rico; Ascoli, Italy; Newbridge, Ireland; and Illertissen, Germany. Its aseptic-manufacturing network will consist of plants in Puurs, Belgium; Perth, Australia; Catania, Italy; and Kalamazoo, Michigan. Its biotechnology-manufacturing network will consist of sites in Grange Castle, Ireland; Strangnas, Sweden; Algete, Spain; Havant, United Kingdom; Andover, Massachusetts; and Sanford, North Carolina. The consumer healthcare network will include plants in Guayama, Puerto Rico; Montreal, Canada; Albany, Georgia; Aprilia, Italy; Hsinchu, Taiwan; and Suzhou, Jiangsu, China.

Kelly explained that the changes underway at Pfizer reflect broader trends affecting the pharmaceutical industry. He points to the growing complexity of pharmaceutical companies’ product portfolios and the resulting need for increased flexibility, specialized capabilities, and technological complexity. He also points to a more dynamic market environment, which requires a need to develop and launch products quickly and to respond to pricing and supply changes as well as increased volatility in demand. These factors contribute to greater pressure on margins and a stronger need to reduce costs of goods sold and justify capital expenditures. As supply networks become more elaborate and costly to operate in light of these factors, Kelly says that “more value is placed on fungible assets for improved utilization and efficiency.  All this must be done while maintaining focus on quality and compliance, supply reliability, and delivering value to our customers,” he adds. 

“There is a critical need for the industry to focus on efficiency gains and value creation,” sums up Kelly. “Through the clarity of our vision and delivering on our strategies, Pfizer will achieve a competitive advantage by offering fast, flexible, and innovative supply solutions,” he concludes. 

http://pharmtech.findpharma.com/pharmtech/article/articleDetail.jsp?id=748002

 to listen to a podcast with John Kelly, vice-president of strategy and transitioning sites for Pfizer Global Supply, who discusses the company's manufacturing and supply strategy and network. 

John Kelly, vice-president of strategy and transitioning sites for Pfizer Global Supply, discusses the company's manufacturing and supply strategy and network.