Patricia Van Arnum was executive editor of Pharmaceutical Technology.

Patricia Van Arnum

Mitigating employee turnover and improving employee retention rates are important objectives of any business, but it is particularly important for contract services providers, which seek to present stable operations to prospective pharmaceutical customers. A recent survey of employee retention and compensation patterns among CROs shows difficulties in the CRO industry as a whole to limit employee turnover. 

Preliminary results from a recent survey by HR+Survey Solutions, a compensation consulting and research firm, showed that CROs continue to struggle with ways to retain talent, according to an Aug. 19, 2013 HR+Survey Solutions press release. The initial findings of an HR+Survey Solutions study reveal that the employee turnover rate at CROs based in the United States remained stagnant in 2012 with 18.6% of employees leaving their companies in 2012 compared with 9.7% in 2011. The turnover rate among CROs outside of the US increased from 17.8% in 2011 to nearly 22% in 2012. The survey examined 20 public and private CROs with sizes ranging from firms with employees of fewer than 500 to organizations with more than 12,000 employees. Compensation data was collected and analyzed for 34 countries worldwide in addition to the US. The high turnover was found among all types of positions from clinical monitoring to data analysis. Project managers were an exception, however, with this group of employees experiencing a decrease in turnover from 21% in 2011 to 10.5% in 2012. 

Although turnover rates remained high in 2012, the use of bonuses by CROs to attract and retain talent increased in 2012, according to the survey. There was a nearly 25% increase in companies that used recruitment bonuses (65% in 2011 and 88% in 2012). In addition, more companies used bonuses to retain talented employees. Fifty‐three percent of companies reported using retention bonuses in 2012 versus 29% in 2011. Companies reported using recruitment bonuses at salaries less than $60,000, and 30% of the companies used them for nonexempt employees.

“We often think of recruitment and retention bonuses being used at the top of the house, but in this tough job market, more and more companies are experimenting with bonuses to attract and retain employees at lower levels,” said Judy Canavan, partner, HR+Survey Solutions, in the company release. “And, with almost all companies planning to implement bonuses in 2013 (87% recruitment and 78% retention), the trick is for them to design the bonus program to meet the needs of the organization. This could mean including time or performance triggers,” she said. 

The annual comprehensive survey reports compensation levels (base salaries plus annual and long-term incentives), employee turnover, annual and long-term incentive plan design, deferred compensation, benefit plans, and perks for 139 benchmark positions in 11 job families, including executive, biostatistics, business development/sales, clinical research, database management, medical affairs, patient recruitment, quality assurance, regulatory, safety/pharmacovigilance, and onsite operations. 

The issue of talent retention, as reported in the 2013 HR+Survey Solutions survey, continues a trend from 2012. The CRO industry experienced a 12.5% voluntary separation (left for new position with higher compensation and/or greater opportunity) rate in 2012 as compared to a 1.5% national voluntary turnover rate based on US Bureau of Labor Statistics, according to a Mar. 28, 2013 HR+Survey Solutions press release. The 12.5% voluntary turnover rate was for all types of positions at CROs, but this figure was even higher for other positions. There was a 24.2% voluntary turnover rate of clinical research associates, according to the 2012 survey. Nearly 20% of project managers, and 13% of data managers left their jobs voluntarily. 

Despite a fragile economy, employment in the CRO industry remained strong in 2012 with companies implementing sign-on bonuses to attract talent. The 2012 survey reported that 65% percent of CROs use sign-on bonuses to attract new talent, but  less than one-third (29%) use retention bonuses to retain employees.

According to HR+Survey Solutions, high employee turnover rates can be particularly damaging to CROs as pharmaceutical companies assess their turnover rates when making decisions about outsourcing clinical trials.Additionally, the study found that the target annual incentives and projected long-term incentive (LTI) levels are markedly lower for CROs as compared to other industries. CRO industry executives with salaries of $250,000 were eligible for, on average, a target annual incentive of 26% of their salary and an LTI of 35% whereas similar executives in other industries were eligible for annual incentives and LTIs of 44% and 51%, respectively. Although the majority (90%) of executive-level employees (senior vice-presidents and vice-presidents), were eligible for annual incentives, only 50% actually received bonuses, according to the 2012 HR+Survey Solutions survey. Approximately 40% were eligible for LTIs, but only about 35% to 40% received a grant. At the manager level, 65% were eligible for annual incentives while 45 percent received bonuses. Six percent were eligible for LTIs, and only 2% received them.

Articles

A recent survey shows that talent retention is an issue on industry level for contract research organizations (CROs), particularly for CROs located outside the United States.

CROs Face Issues with Talent Retention

The science- and risk-based approach in quality by design (QbD) entails greater product and process understanding as a means to ensure product quality. These concepts are embodied in ICH guidelines Q8 (R2) 

Development and Manufacture of Drug Substances (Chemical Entities and Biotechnological/Biological Entities) 

(1-4), which offer a lifecycle approach to continual improvement to drug manufacturing.   
  
  


ICH Q11 focuses specifically on the development and manufacture of drug substances. It specifies that a company can follow “traditional” or “enhanced” approaches or a combination of both in developing a drug substance (4). In the traditional approach, set points and operating ranges for process parameters are defined, and the drug-substance control strategy is typically based on process reproducibility and testing to meet established acceptance criteria (4). In an enhanced approach, risk management and scientific knowledge are used more extensively to identify and understand process parameters and unit operations that affect critical quality attributes (CQAs) (4). The enhanced approach further includes the development of appropriate control strategies applicable over the lifecycle of the drug substance that may include the establishment of design space(s) (4). Manufacturing process development should include, at a minimum, according to ICH Q11:

Identifying potential CQAs associated with the drug substance so that those characteristics having an impact on drug-product quality can be studied and controlled

Defining an appropriate manufacturing process

Defining a control strategy to ensure process performance and drug-substance quality (4).

An enhanced approach to manufacturing process development would additionally include: 

A systematic approach to evaluating, understanding, and refining the manufacturing process, including identifying--through prior knowledge, experimentation and risk assessment--the material attributes (e.g., of raw materials, starting materials, reagents, solvents, process aids, intermediates) and process parameters that can have an effect on drug-substance CQAs

Determining the functional relationships that link material attributes and process parameters to drug-substance CQAs (4). 

The enhanced approach, in combination with quality risk management, is used to establish an appropriate control strategy. Those material attributes and process parameters important to drug-substance quality should be addressed by the control strategy. The risk assessment can include an assessment of manufacturing process capability, attribute detectability, and severity of impact as they relate to drug-substance quality (4). For example, when assessing the link between an impurity in a raw material or intermediate and drug-substance CQAs, the ability of the drug-substance manufacturing process to remove that impurity or its derivatives should be considered in the assessment (4). The risk related to impurities can usually be controlled by specifications for raw material/intermediates and/or robust purification capability in downstream steps. It is important to understand the formation, fate (whether the impurity reacts and changes its chemical structure), and purge (whether the impurity is removed via crystallization, extraction, etc.) as well as their relationship to the resulting impurities that end up in the drug substance as CQAs (4). The process should be evaluated to establish appropriate controls for impurities as they progress through multiple process operations (4).


  In March 2011, the European Medicines Agency and Food and Drug Administration launched a three-year pilot program for a parallel assessment by both agencies of certain quality and chemistry, manufacturing and control (CMC) sections of new drug applications submitted to FDA and marketing authorization applications (MAAs) submitted to EMA that are relevant to QbD, such as development, design space, and real-time release testing. The objective of the pilot, which is scheduled to end Mar. 31, 2014, is to ensure consistent implementation between the European Union and the United States of ICH guidelines Q8, Q9, Q10, and Q 11 and to facilitate sharing of regulatory decisions (5-7). 

In August 2013, the agencies reported that the first EMA-FDA parallel assessment of QbD elements of an initial MAA was successfully finalized as well as some consultative advice procedures. In a question-and-answer format, EMA and FDA reported on their expectations as they relate to quality target product profiles (QTPPs), CQAs, classification of criticality, and application of QbD in analytical method development (7). 

With respect to the QTPP, the agencies specified that they expect applicants to provide the QTPP, which describes prospectively the quality characteristics of a drug product that should be achieved to ensure the desired quality, safety, and efficacy of the drug product. With respect to CQAs, the agencies expect applicants to provide a list of CQAs for the drug substance, finished product, and excipients when relevant. This list should also include the acceptance limits for each CQA and a rationale for designating these properties as a CQA. Furthermore, there should be a discussion of how the drug substance and excipient CQAs relate to the finished product CQAs based on prior knowledge, risk assessment, or experimental data. The basis of the control strategy is to ensure that the drug substance and finished product CQAs are consistently within the specified limits (7).

Another issue was whether the agencies would accept a three-tier classification of criticality for process parameters. The agencies responded that ICH Q8 (R2) specifies that a critical process parameter is one whose variability has an impact on a CQA and needs to be monitored or controlled to ensure the process produces the desired quality. EMA and FDA cited a regulatory submission in which the applicant proposed an approach to risk assessment and determination of criticality that included a three-tier classification (“critical,” “key,” and “noncritical”) for quality attributes and process parameters. Using this classification, a “critical” factor was defined as a factor that led to failure during experimentation. A factor that had not led to failure within the range studied, but still may have an impact on product quality, was considered as a “key” factor. The agencies said that they do not support the use of the term “key process parameters (KPP)” because it is not ICH terminology and there is differing use of the term “key” among applicants. Although FDA and EMA said they are amenable to this terminology in the pharmaceutical development section to communicate development findings, they are not in describing the manufacturing process, process control, and control of critical steps and intermediates, where the description of all parameters that have an impact on a CQA should be classified as critical (7).

The agencies further specified that process manufacturing descriptions be comprehensive and describe process steps in a sequential manner, including batch size(s) and equipment type. The critical steps and points at which process controls, intermediate tests, or final product controls are conducted should be identified (7). Steps in the process should have the necessary detail in terms of appropriate process parameters along with their target values or ranges. The process parameters that are included in the manufacturing process description should not be restricted to the critical ones; all parameters that have been demonstrated during development as needing to be controlled or monitored during the process to ensure that the product is of the intended quality need to be described (7).

The agencies also commented on QbD as it relates to analytical methods using risk assessments and statistically designed experiments to define analytical target profiles (ATP) and method operational design ranges (MODR) for analytical methods (7). “There is currently no international consensus on the definition of ATP and MODR,” noted the agencies. “Until this is achieved, any application that includes such proposals will be evaluated on a case-by-case basis” (7). The agencies noted, however, that an ATP can be acceptable as a qualifier of the expected method performance by analogy to the QTPP as defined in ICH Q8 (R2), but the agencies would not consider analytical methods that have different principles (e.g., high-performance liquid chromatography  and near-infrared [NIR] spectroscopy) equivalent solely on the basis of conformance with the ATP. “An applicant should not switch between these two types of methods without appropriate regulatory submission and approval,” they said. The agencies also noted that similar principles and data requirements could apply for MODRs. For example, data to support an MODR could include: appropriately chosen experimental protocols to support the proposed operating ranges/conditions and demonstration of statistical confidence throughout the MODR. Issues for further reflection include the assessment of validation requirements as identified in ICH Q2 (R1) throughout the MODR and confirmation of system suitability across all areas of the MODR (7). The agencies further indicated that future assessment of the pilot program will include other lessons learned in areas such as design-space verification, the level of detail in submissions for design space and risk assessment, continuous process verification, and continuous manufacturing.


  A review of recent literaure reveals some interesting applications of QbD in drug-substance development and manufacturing. For example, scientists at Bristol-Myers Squibb reported on a process-modeling method using a QbD approach in the development of the API ibipinabant, a cannabinoid receptor 1 antagonist being developed to treat obesity (8). In its development, the molecule had volume requirements of 6 kg for toxicology studies and formulation development, which later increased to 175 kg for late-stage clinical trials. The researchers used mechanistic kinetic modeling to understand and control undesired degradation of enantiomeric purity during API crystallization. They implemented a work flow, along with kinetic and thermodynamic process models, to support the underlying QbD approach and reported on the use of risk assessment, target quality specifications, operating conditions for scale-up, and plant control capabilities to develop a process design space (8). Subsequent analysis of process throughput and yield defined the target operating conditions and normal operating ranges for a specific pilot-plant implementation. Model predictions were verified from results obtained in the laboratory and at the pilot-plant scale (8). Future efforts were focused on increasing fundamental process knowledge, improving model confidence, and using a risk-based approach to re-evaluate the design space and select operating conditions for the future scale-up (8).

Scientists at Merck & Co. reported on their work in applying QbD to set up an improved control strategy for the final five steps in the production route of a legacy steroidal contraceptive, which has been produced for more than 20 years within its facilities (9). A generic ultra-high-performance liquid chromatography method was developed according to QbD principles to create a range of proven acceptance criteria for the assay and side-product determination for the final five steps in the production route of the API (9).

Scientists at Eli Lilly reported on a systematic approach consisting of a combination of first-principles modeling and experimentation for the scale-up from bench to pilot-plant scale to estimate the process performance at different scales and study the sensitivity of a process to operational parameters, such as heat-transfer driving force, solvent recycle, and removed fraction of volatiles (10). This approach was used to predict process outcomes at the laboratory and pilot-plant scale and to gain a better understanding of the process. The model was also used further to map the design space (10). 

In other work, scientists reported on the application of latent variables-based modeling to a reaction process in a small-molecule synthesis based on continuous-flow hydrogenation (11). In another study, scientists reported on using a QbD approach for designing improved stability studies (12). Also, scientists at UCB and the Institut des Sciences Moléculaires de Marseille in France recently reported on the feasibility of using online NIR spectroscopy as a process analytical technology tool to monitor in real time the API and residual solvent content to control the seeding of an API crystallization process at industrial scale. A quantitative method was developed at laboratory scale using statistical design of experiments and multivariate data analysis (13). 

Development and Manufacture of Drug Substances (Chemical Entities and Biotechnological/Biological Entities)

(2012). 
  5.	FDA, “FDA, EMA Announce Pilot for Parallel Assessment of Quality by Design Applications,” Press Release, Mar. 16, 2011.
  6.	EMA, “European Medicines Agency and US Food and Drug Administration Announce Pilot Program for Parallel Assessment of Quality by Design Applications,” Press Release, Mar. 16, 2011. 
  7.	EMA, “EMA-FDA Pilot Program for Parallel Assessment of Quality-by-Design Applications: Lessons Learnt and Q&A Resulting from the First Parallel Assessment,” Press Release, Aug. 20, 2013. 
  8.	S.B. Brueggemeier et al., 

16 (4) 567-576 (2012). 
  9.	J. Musters et al., 


  17 (1) 87-96 (2013).
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, online, DOI: 10.1021/op4001127, July 22, 2013. 
  11.	Z. Shi, N. Zaborenkdo, and D.E. Reed, 
  

 7 (3-4) 
  205-213 (2012).
  13.	C. Schaefer et al., J. 

 online, DOI.org/10.1016/j.jpba.2013.05.015. May 20, 2013. PT

The adoption of quality by design in small-molecule drug development and manufacturing continues to evolve as the industry seeks ways to augment process understanding for APIs

Quality by Design in APIs

Chiral chemistry plays an important role in pharmaceutical development and manufacturing. Strategies in asymmetric synthesis to produce single-enantiomer drugs as well as methods for detecting and quantifying chirality are important tools for pharmaceutical chemists. Some recent developments involve stereoretentive cross-coupling for producing libraries of single enantiomers, an approach in enantioselective alcohol silylation, strategies for amplifying signals in circular dichroism spectroscopy, and a synthetic route to the natural product ingenol.


  Mark R. Biscoe, assistant professor of chemistry at the City College of New York (CCNY), and his team recently reported on a new method for preparing libraries of single-enantiomer molecules for therapeutic and toxicity studies that is faster and potentially less costly than methods now used in the pharmaceutical industry, according to a Aug. 15, 2013 CCNY press release. Specifically, the researchers developed a general palladium-catalyzed process for the stereoretentive cross-coupling of secondary alkyl azastannatrane nucleophiles with aryl chlorides, bromides, iodides, and triflates (1). The researchers reported that coupling partners with a wide range of electronic characteristics were well tolerated and that the reaction occurred with minimal isomerization of the secondary alkyltin nucleophile (1). The researchers assert that the process constituted the first general method to use secondary alkyltin reagents in cross-coupling reactions (1). 
  
  


  Researchers at Boston College (BC) reported on a new computational approach for enantioselective alcohol silylation (2) that reduced the reaction time to less than one hour, down from a period of two to five days, reduced catalyst loading, and produced an overall more efficient reaction, according to a July 2013 BC press release. Based on a computational projection, the researchers used cocatalysts to achieve the reaction improvements in enantioselective silyl protection of alcohols promoted by a combination of chiral and achiral Lewis basic catalysts (2). The researchers used a cocatalyst model involving two Lewis base molecules adding the achiral molecule to an already present chiral molecule. These cocatalysts operated in concert, with the chiral molecule activating an alcohol, and the additional achiral molecule, from commercially available 5-ethylthiotetrazole, activating silicon, according to the BC release. Identifying the influence of ethylthiotetrazole was a key component and provided the researchers the ability to effectively control the interplay between the cocatalysts. Together, the Lewis bases served as a closely related Brønsted base to allow the catalyst to work faster while retaining high enantioselectivity. 
  
  “The bottom line is the reaction goes a lot faster,” said Marc Snapper, professor of chemistry at BC, in the BC release. “The practical advance is adding the tetrazole, which greatly accelerated the pace of the reaction by doing a much better job activating the silicon reaction partner.” The BC researchers suggest that the new conceptualization of the catalyst could lead to the development of new processes that require separate and independently operational Lewis basic cocatalysts, which can overcome the overlapping functions of cocatalysts and eliminate detrimental effects on the production of new molecules with high enantioselectivity (2).
  


  Nanotechnology in discerning chirality


  Researchers at the US Department of Energy’s Brookhaven National Laboratory (BNL) and Ohio University have developed a simpler way to discern chirality by using gold and silver cubic nanoparticles to amplify the difference in the enantiomers to circularly polarised light, according to a June 26, 2013 BNL press release. The researchers showed that nonchiral nanoparticles, specifically gold/silver core/shell nanocubes, can act as plasmonic reporters of chirality for attached molecules by providing two orders of magnitude circular dichroism enhancement in a near-visible region (3). 
  
  “Our discovery and methods based on this research could be extremely useful for the characterization of biomolecular interactions with drugs, probing protein folding, and in other applications where stereometric properties are important,” said Oleg Gang, a researcher at Brookhaven’s Center for Functional Nanomaterials in the BNL release. “We could use this same approach to monitor conformational changes in biomolecules under varying environmental conditions, such as temperature--and also to fabricate nano-objects that exhibit a chiral response to light, which could then be used as new kinds of nanoscale sensors.”

The use of nanoparticles to amplify the signal was done to overcome the weak signal when applying circular dichroism spectroscopy in the ultraviolet range for chiral molecules. The researchers were guided by experimental work that showed that coupling certain molecules with metallic nanoparticles would increase their response to light (4) as well as theoretical work that suggested that the plasmonic particles, which induce a collective oscillation of the material’s conductive electrons to create stronger absorption of a particular wavelength, could move the signal into the visible spectrum, where it would be easier to measure, according to the BNL release.

The researchers experimented with different shapes and compositions of nanoparticles and found that cubes with a gold center surrounded by a silver shell are not only able to show a chiral optical signal in the near-visible range, but also were effective signal amplifiers. For their test biomolecule, they used synthetic strands of DNA. When DNA was attached to the silver-coated nanocubes, the signal was approximately 100 times stronger than it was for free DNA in the solution, according to the BNL release. The observed amplification of the circular dichroism signal is a consequence of the interaction between the plasmonic particles and the energy absorbing-electrons within the DNA-nanocube complex, according to the BNL release. The researchers note that the work can serve as a platform for ultrasensitive sensing of chiral molecules and their transformations in synthetic, biomedical and pharmaceutical applications. 

In another development, researchers at Harvard University, the Center for Free-Electron Laser Science (CFEL), and the Max Planck Institute in Germany reported on enantiomer-specific detection of chiral molecules by microwave spectroscopy (5, 6). The approach sought to overcome limitations in circular dichroism and vibrational circular dichroism spectroscopy, which are commonly used in analysing chiral molecules, but which produce weak signals and require high sample densities (5, 6). The researchers carried out nonlinear resonant phase-sensitive microwave spectroscopy of gas-phase samples in the presence of an adiabatically switched nonresonant orthogonal electric field. They used this technique to map the enantiomer-dependent sign of an electric dipole Rabi frequency onto the phase of emitted microwave radiation (5, 6) and described how this approach can be used for determining the chirality of cold gas-phase molecules. They implemented the approach experimentally to distinguish between the S and R enantiomers of 1,2-propanediol and their racemic mixture. “We can soon measure mixtures of different compounds and determine the enantiomer ratios of each,” said Melanie Schnell, co-author of the study in a CFEL release. The researchers plan to apply the technique in a broadband spectrometer at CFEL that could measure the enantiomer ratios in mixtures of substances, and longer term, the method opens a way for separating enantiomers (6).
  
  


  Natural products are well-established sources for drug candidates but developing synthetic routes to natural products can often pose a problem. Scientists at The Scripps Research Institute (TSRI) recently reported on their work in developing what they characterize as the first efficient chemical synthesis of ingenol, a plant-derived compound with anticancer potential, according to an Aug. 1, 2013 TSRI press release. The work enables the synthesis of various ingenol derivatives and also sets the stage for the commercial production of ingenol mebutate, the API in Picato, a drug to treat actinic keratosis, a common precursor to nonmelanoma skin cancer. Picato was approved by the FDA and the European Medicines Agency in 2012. 

Ingenol mebutate, a macrocyclic diterpene ester, is a purified ingenol angelate extracted from the aerial parts of 

 plant. The molecule has eight chiral centers and one “nonrestricted” double bond, thus, there is a theoretical possibility of up to 512 stereoisomers (7). The ingenol mebutate is obtained from the dried, milled aerial parts of the plant by extraction followed by a series of purification steps. The final step of the process involves crystallization (7). In late 2011, the drug’s manufacturer, the Danish pharmaceutical company LEO Pharma, collaborated with TSRI to develop an efficient way to synthesize ingenol mebutate and ingenol derivatives. The scientists developed a stereocontrolled synthesis of (+)-ingenol in 14 steps from inexpensive (+)-3-carene and used a two-phase design (8). The researchers assert the results validate that two-phase terpene total synthesis is an alternative to isolation or bioengineering for preparing polyoxygenated terpenoids (8).

 5 (7) 607-612 (2013). 
  2.	N. Melville et al., 

 online, DOI10.1038/nchem.1708, July 28, 2013.
  3.	O. Gang et al., 

 13 (7) 3145-3151 (2013). 
  4.	M.M. Maye, O Gang, and M. Cotlet, 

. 46 (33) 6111-6113 (2010). 
  5.	D. Patterson, M. Schnell, and J.M. Doyle, 

 497 (7450) 475-477 (2013).
  6.	P. Van Arnum, 

. 37 (6) 46 (2013).
  7.	EMA, “Assessment Report: Picato” (London, Sept. 20, 2012).
  8.	P.S. Baran et al., 

 online, DOI: 10.1126/science.1241606, Aug. 1, 2013.

Patricia Van Arnum  is a executive editor of Pharmaceutical Technology, 485 Route One South,  Bldg F, Ste 210, Iselin, NJ 08830 tel. 732.346.3072,  pvanarnum@advanstar.com.

Developments involve stereoretentive cross-coupling, enantioselective alcohol silylation, strategies for amplifying signals in circular dichroism spectroscopy, and a synthetic route for the natural product ingenol.

Advancing Chiral Chemistry in Pharmaceutical Synthesis

As fine-chemical companies, contract manufacturers, and pharmaceutical companies gather in Frankfurt  for CPhI Worldwide, on Oct. 22-24, a fundamental question is on the minds of exhibitors and attendees alike: namely, what is the current and future direction of the industry? To answer that question, Pharmaceutical Technology gained the views of chemical API manufacturers on the key issues shaping the pharmaceutical industry and their impact on supply-demand fundamentals for contract small-molecule manufacturing and the outsourced relationship. Participating in the roundtable were: Susan Daly, PhD, and API technical manager, Aesica Pharmaceuticals; Kurt Hoeprich, global business manager, pharmaceuticals, Albemarle; Brian Scanlan, CEO and president of Cambridge Major Laboratories; Mark Griffiths, CEO, the Dishman Group of Companies; and Andreas Weiler, PhD, head of global strategic marketing, contract manufacturing services and solutions, SAFC. 

 In looking at the market for fine chemicals and contract API manufacturing, what are the key factors affecting supply and demand? How would you assess the current market and the near-term outlook? 

 Demographics, life expectancy, and the fact that the ‘pharmerging’ countries will double their medicine spending within the next five years will increase the global demand of pharmaceuticals. Healthcare cost-saving programs in the developed countries and patent expiries, however, will accelerate the use of generics, so by 2014, 85% of all drugs by volume will be generics. 

Nevertheless, we have seen an increase in approvals of new molecular entities (NMEs) to 30 and 39, respectively in 2011 and 2012 compared with 21 NMEs approved in 2010, with approximately 70% of these small-molecule drugs. We strongly believe that this trend, together with an increase in biological drugs, will continue as we are facing a paradigm shift from general care (i.e., blockbusters) to more specialist care drugs.  

 The trend for Large Pharma to concentrate on their core competencies continues, which increases the opportunity for CDMOs. Large pharma companies continue to divest their sites, and as a result, continue to increase their outsourcing requirements. There are certain additional complexities, such as potent capabilities, which are not typically available in-house to large pharma organizations. There is a growing trend for large pharma to outsource potent drug handling to CDMOs that have the established infrastructure and expertise to manage such complexities. Additionally, the growing importance of the BRIC countries (Brazil, Russia, India, and China) and the Next Eleven (N-11) (Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam) economies is leading all pharmaceutical companies to develop strategies for these markets. Also, biotechs and virtual companies offer a source of innovation and are a key source of new drug development. Typically, these companies have limited or no manufacturing capabilities in house. The financial environment is now becoming more favorable, allowing smaller companies easier access to more funding opportunities and biotech firms to outsource to CDMOs. 

 At Cambridge Major Laboratories, we definitely see a trend toward increased outsourcing. Whether for cost-containment reasons or to access specific expertise, we know that the outsourcing model is here to stay. What’s really interesting is that in spite of significant offshore investment by Large Pharma and by large CMOs, we notice a trend of demand returning to the United States. The cost advantage once promised by offshoring has eroded, and recent quality issues have generated concern for employee safety, patient safety, and overall project risk. When you factor the increased number of NCEs with permeability and solubility issues and those that require higher containment, the field of choices for API manufacturers that possess these capabilities, to a sufficient degree, narrows significantly. Because nearly two-thirds of drugs from the synthesis stage have low solubility (< 0.1 mg/mL), API manufacturers that offer solid-state chemistry services possess a critical advantage in the current market. Similarly, those with collective experience and expertise in handling high-potency APIs are well poised to take share in the rapidly growing submarket currently experiencing almost double-digit growth. Overall, the current market for contract API manufacturing is robust, and the near-term outlook is positive for companies with a customer-service focus, strong quality record, and sufficient productivity to ensure global cost competitiveness.

There has been a return of venture-capital funding of small and emerging biopharmaceutical companies, which is enabling the funding of innovative research into new therapies. Over the past two years, our early-phase development capabilities have been extensively occupied with new candidates for small and medium biopharma companies. This is encouraging as, even given the attrition rate at the end of Phase II and into Phase III, there will be a number of NCEs being launched from our facilities in the next 18 months. We continue to invest in additional capabilities, such as high-potency high-performance liquid chromatography (HPLC), antibody-drug conjugate capabilities, and semi and fully automated early-phase parenteral fill-finish. Just doing the same thing will not grow our business; we have to innovate alongside our clients.

 The industry as a whole has faced certain large issues, such as pharmaceutical industry restructuring, the increased role of generic drugs, greater strategic importance for emerging markets, and an increased focus on biologic-based drug development. What have been the implications for small-molecule drug development and commercialization, and what other factors are influencing the paradigm for small-molecule drug development and commercialization?

 As a consequence of the upcoming patent cliff and the loss of approximately $120 billion, we have seen many mergers and consolidations within Big Pharma. Cost pressure forced many companies to shift parts of their small-molecule API manufacturing to Asia; others have started to use their empty-reactor capacity to compete in the CMO industry. All this was accompanied by a significant drop in 
small-molecule new drug approvals from 2000 to 2010, creating approximately 40% production overcapacity.

 The increase in new drug approvals over the past two years is mainly driven by innovative therapeutics anticipated for cancer, Alzheimer’s disease, diabetes, orphan diseases, and biological-derived drugs, which will represent one-third of all branded drug sales within the next five years. Many of these new drugs are extremely potent and require highly sophisticated production technologies. In other words, they’re difficult to make and even more difficult to copy, which is the reason they’re a perfect fit for Western CMOs. 

 There is recognition within the industry that biologic-based drug development is increasing and becoming more prominent in the strategies of Large Pharma. Outsourcing of biologic development and manufacture, although a growing market, is not as mature as the outsourcing of small-molecule drug development and manufacture. There continues to be growth in the small-molecule sector, and outsourcing of biologics is not currently forecast to overtake small-molecule development in the short to medium term as large pharma organizations tend to keep biologic projects in-house. 

 To deliver the highest quality products and fully comply with regulatory requirements, the major trend we have observed is the need to efficiently conduct comprehensive process development by adhering to the quality-by-design approach described in guidance documents from FDA. With this approach to development, we commonly exploit design of experiments to ensure a thorough understanding of the process design space and establish validation protocols for robust and reliable commercial-scale production. Albemarle has continued to invest in multi-unit reactor systems and analytical tools to efficiently execute this comprehensive approach to process development and scale-up. Additionally, we see an increasing need to qualify key raw-material suppliers through in-person audits of production facilities, regardless of location. Albemarle’s global presence, which includes a team of sourcing professionals based in China, has facilitated rapid in-person quality audits of key raw-material suppliers. 

It is certainly the case that Large Pharma continues to divest noncore assets, which drives increased overall demand for contract pharmaceutical manufacturing. Emerging markets, such as India and China, have seen strong recent growth due to a rise in demand for generic drugs, and of course, biosimilars are driving expertise-based outsourcing for biologic-based drug development. 

Yet, with respect to proprietary APIs, there is definitely an odd phenomenon in the chemical manufacturing industry. Although the majority of proprietary drugs are developed in North America and North America continues to be the largest pharmaceutical marketplace in the world, the bulk of development and manufacturing of chemical assets do not occur in this region. The pharmaceutical chemistry development industry has evolved in a way that is out of sync with the market at large, but we are starting to see the market swing back into sync. We see regional price differences leveling off, and concerns about quality and security of intellectual property driving demand back to first-world markets and investment in core API infrastructure, particularly in North America. In Europe, excess capacity and the age of facilities drive price competition; however, there is still a lack of quality assets in Europe. Meanwhile, recent facility expansions, commitment to employee and environmental safety, ease of communication, and disciplined project management have resulted in strengthened demand in North America for small-molecule drug development and commercial manufacture.

 I think that Large Pharma has actually always been in the midst of restructuring, certainly in my 30 years in the industry, but the rate of change has increased during the past three years. Where will it end? I guess it will, depending on a complex number of factors that affect Large Pharma’s in varying degrees: R&D output, a rise in costs that affects all of us, regulatory pushback, government pricing policy for new drugs, and access to reasonable patent durations. Ten years ago, Large Pharma set the tone for the outsourced market. I think this has fundamentally changed, and the more ‘aggressive,’ fast-on-their-feet, small and medium biopharm companies certainly set the tone for much of what we do in the Dishman Group and especially at the Carbogen-Amcis boundary. We are constantly challenged to think outside the box by our clients, and this has raised our game as a supplier and innovator, a very rewarding set of circumstances where there is the chance to really form partnerships predicated on mutual need and a desire to focus on the needs of the patient.

 How have the expectations between contract manufacturers and their sponsor companies changed in terms of technical capabilities, geographic/global capabilities, and in managing the outsourced relationship?  

 The ‘old strategic partnership model’ was never really going to work as there was a fundamental need on the part of us (i.e., the CMOs) but a much lower ‘need’ from the outsourcing company. We, as CMOs, fought among ourselves cutting price to compete, and this ultimately benefitted the outsourcing company, not our own businesses. Fundamentally, a partnership relies on elements of mutual need, common goals, and the understanding that both parties are completely open about key elements for each program. In the end, meeting all the deliverables, on time, on quality, and on budget are the key metrics, but great science, project management, flexibility on our part, and an absolute passion for communication get these metrics met. 

 The relationships between sponsor companies and CDMOs have moved from tactical to more strategic relationships due to pharmaceutical companies continuing to reduce their number of suppliers and developing a fewer number of more preferred partner relationships. This continuing trend within the industry will drive consolidation within the contract manufacturing space. 

As regulatory requirements increase and the number of activities an API manufacturer must conduct becomes greater and more complex, we see more strategic relationships developing. We believe this is due to time savings and resource-utilization benefits that can be gained from working with one entity that can conduct comprehensive process development and a full range of validation activities and commercial-scale production while still managing all key raw-material sourcing. In our opinion, there is a push to utilize one supplier for all development needs and commercial manufacturing rather than parcel out numerous tasks to multiple suppliers and service providers.

The increased complexity of new drugs makes it important for sponsors and CMOs to work hand in hand building strategic partnerships, sharing best practices, and developing solutions together with the aim of increasing their productivity and shortening the time to market. 
In the case of some sponsor companies, however, we’re seeing more of a shift away from the partnership model and a main focus on cost savings as the key drivers in their relationships. It will be very interesting to see what model will be more successful in future years. 

We absolutely see trends toward supplier consolidation and outsourcing according to project complexity, and we give a great deal of thought to what makes a partner versus a transactional supplier. At the minimum, a partner should offer the full breadth of capabilities required so that the ability to deliver project results on time is never compromised. For some of our customers, this means the ability to take a compound from preclinical through commercial manufacture at a single site, regardless of whether that site is in North America or Europe. For other customers, this means ensuring that our analytical and quality-assurance departments have equal strength to our chemistry development and manufacturing capabilities, so that we identify and resolve potential issues quickly with timely communication. And for others, it means adopting a service mentality--the ability to remain flexible and responsive in the face of changing demands.  This flexibility is especially important for early-development projects where client requirements or process R&D decisions can change, but it is also important for late-phase projects where continued engagement and optimization adds value.

In looking ahead five years from now, how will the model for contract API manufacturing and fine-chemical manufacturing be the same? How might it be different? What do you think will be the key issues of the future affecting small-molecule drug development and commercialization, including the model for contract manufacturing? 

 Currently, less than 20% of all drugs in the clinical pipeline are innovated by Big Pharma, yet some of these companies have a lot more internal focus. They have their own scientific experts, which can create a challenging environment for a CMO. The remaining 80% (more than 8000) of drugs are originated at virtual, small, and mid-sized pharma companies. Many of those companies have no desire to build up internal capacity or know-how. They are in need of advice and are looking to build strategic partnerships with their CMOs with the goal of increasing productivity and getting their complex drugs to market faster. 

A key issue for the regulatory authorities will be finding a solution to handle an increasing number of new drug approvals with smaller and narrower patient populations. In many cases, there will be increased diagnostic requirements to test the drugs, and in some cases, companies will be seeking fast-track or orphan-drug status. This change will require a refined and strategic approach to approvals, including new resources in the approval process.

 The industry will see more large pharma companies working with fewer, more strategic partners, resulting in further consolidation within the marketplace. The drive toward fewer partners will see Large Pharma looking for CDMOs with a full service of development and manufacturing services for API and formulated products. 

We believe biotechnology and pharmaceutical companies will continue to increase the number of small molecules outsourced for process development, scale-up, and commercial production. Also, we believe developments, such as the Generic Drug User Fee Act, will enable faster and more predictable reviews of applications and supplements and that this will ultimately benefit patients in terms of availability of needed medications that have been produced at facilities that are consistently inspected by FDA. 

The current global CMO landscape is heavily fragmented, and it can be difficult to determine clear points of difference among firms. Five years from now, I think we will be seeing a more consolidated industry where firms have differentiated themselves more clearly in approach to quality, ease of doing business, proprietary expertise, and the ability to deliver solutions in areas of more rapidly growing demand, such as more complex chemistries, high-potency APIs, improved analytical capabilities, and small-volume manufacturing.

 I am surprised that so many of us in the CMO world have managed to survive since 2008, a testament in some way to the tenacity and capability of our subset of the pharma industry. Survival in the future, however, will depend on being diversified in customer bases, technology, and capabilities (i.e., API, formulation, small-molecule, and biologics) as well as having a global presence and most importantly, having the best possible scientists, project managers, and courageous leadership. Analytical capability is becoming a real differentiator. The bar for data supporting the ‘white powder’ has been raised significantly by the regulatory agencies, so having a few HPLC and gas chromatography systems in a laboratory just isn’t going to be enough these days. Having the expertise to interpret data is already key, and this need will increase.

Industry experts share their views on the outsourcing model and the current and future direction of contract chemical API manufacturing.

Gaining Insights on Contract Chemical API Manufacturing An Industry Roundtable

Proper risk assessment and risk mitigation are crucial for pharmaceutical manufacturing to ensure product quality. A proposed new standard, the NSF/IPEC 363: Good Manufacturing Practices for Pharmaceutical Excipients, requires application of risk-assessment principles to prevent contamination from personnel, equipment, and facilities. Risk management is also used in supplier qualification, change management, and rework activities. Industry experts share their perspectives on risk assessment and mitigation in excipient manufacture and the excipient supply chain.  

The International Pharmaceutical Excipients Council of the Americas (IPEC-Americas) and NSF International, an accredited standards developer of the American National Standard Institute (ANSI), have developed a new American national standard for excipient GMPs, the NSF/IPEC 363: Good Manufacturing Practices for Pharmaceutical Excipients. The proposed standard, which is being finalized, is based on the IPEC-PQG Excipient GMP Guide, a joint initiative between the International Pharmaceutical Excipients Council (IPEC) and the Pharmaceutical Quality Group (PQG). The proposed standard defines GMPs for excipient manufacture for use in drug products and specifies the components of a quality-management system for excipient manufacture consistent with the GMP principles in the IPEC-PQG Excipient GMP Guide. The proposed NSF/IPEC 363 standard requires application of risk-assessment principles to define and justify appropriate GMP controls in order to mitigate risk to prevent contamination from personnel, equipment, and facilities. Risk assessment also is used for supplier qualification, change management, and rework activities. 

To understand how risk-assessment principles have and can be applied across the excipient supply chain, Pharmaceutical Technology moderated an industry roundtable at ExcipientFest 2013, which was held in Baltimore, Apr. 29 to May 1, 2013. Some highlights of that roundtable are provided with  input from the following panelists: Irwin Silverstein, chief operating officer, International Pharmaceutical Excipients Auditing (IPEA); Janeen Skutnik, partner, NSF-DBA, chair of the IPEC Federation, past chair of IPEC-Americas, and former director of quality strategy at Pfizer; Steven Wolfgang, PhD, associate director, Risk Science, Intelligence and Prioritization (acting), FDA’s Center for Drug Evaluation and Research, Office of Compliance, Office of Drug Security, Integrity and Recalls; Dale Carter, global quality director, silica, J.M. Huber Engineered Materials, member of the IPEC-Americas Executive Committee, and immediate past chair of IPEC-Americas; and Meera Raghuram, manager for global regulatory affairs and strategies at Lubrizol and current chair of the IPEC-Americas Regulatory Affairs Committee.  
  
  

 What was the rationale for developing the NSF-IPEC standard and how did it come into being? 

One of the key rationales we had was the IPEC-PQG GMPs that were revised in 2006. In the 2008-2009 timeframe, IPEC, as an organization, decided that it wanted to evolve the guideline to the next level so that we could possibly have it used and referenced by the agency, by other agencies around the world, and take it into a standard, an auditable standard, as opposed to a guideline.  

At that point, we had a discussion with NSF to develop an American national standard. We felt it was an important step forward to create a document that could be used officially as an auditable standard that would be in compliance with the Office of Management and Budget Circular A119, which establishes policies on federal use and development of voluntary consensus standards. This measure is guidance to US government agencies to allow them to refer to consensus-based standards in lieu of developing a standard within an agency of the US government.  

We pulled together experts on excipients, not only from the US and industry, but also from regulatory authorities and public-health agencies in Europe and the US, and of course, key industry representatives who not only worked on the IPEC-PQG original GMPs but also those who have been involved and knowledgeable about excipients for 20, 30, and 40 plus years. It’s been a great process in terms of getting people together and looking at harmonizing expectations. Again, it is not just focused on what’s important in the US, but also what is important globally.  

In terms of the specifics of the standard, certainly anyone familiar with the IPEC guidance will notice a lot of the same key things are emphasized as well as those familiar with ICH Q10 Pharmaceutical Quality System or ISO guidelines. It is focused on a robust, effective quality-management system. It helps you understand what a quality culture is within a company. Whether you’re talking about pharmaceuticals, excipients, or APIs, if a company doesn’t embrace a quality culture, it will always struggle with GMP compliance because if people don’t understand the importance of quality, they’re not ever going to quite get there. The standard helps you assess and look at what the quality culture of a company is by how it approaches all the different elements of a quality-management system. There are expectations for what the appropriate facilities and controls are, what the appropriate documentation is, and what the appropriate personnel and training are. That is something that, time and time again, is very important, not only for excipient manufacturers, but for all parties throughout the supply chain to understand what they’re doing, why they’re doing it, and how it translates to a patient outcome or a patient impact. 

Appropriate test methods and controls are part of an overall process. It is an auditable standard, so it provides a tool for overall supplier qualification. It incorporates all the necessary elements from ICH Q10 

Pharmaceutical Quality System and Q9 Quality Risk Management.  

 How does the proposed NSF-IPEC standard build upon the IPEC-PQG Excipient GMP Guide? 

The IPEC-PQG guide is just that, a guideline, so in certain sections, such as air handling, utilities, personnel protection, and gowning, it would provide several examples of what to do in certain situations. For example, it would say that if you needed a controlled environment, then you had to control it. It was written in a way that those reasonably knowledgeable of what they were doing could look at it and make reasonable decisions and put in their own programs and processes. What the ANSI standard did was it took those examples and translated them into a standard that you could audit. For example, rather than getting prescriptive, it specifies you must do a risk assessment. It took the elements that were already in the guide and said consider these points. The proposed standard then took the points or the examples we gave in the guide to help someone understand and relate them to his/her own process and put them as a kind of a mnemonic for conducting the risk assessment. The standard preloaded your risk assessments by stating the risk questions, ‘What are you trying to prevent, and how are you doing that?’ And in trying to prevent this end, consider these things. The proposed standard  does that throughout by talking about work environment, utilities, control of gowning or personnel, rework, or other aspects that made it into a standard that could be audited.

For the excipient manufacturer, what it does is it puts a little work on you. To convert from being a IPEC-GMP-compliant company into being a company that could be certified under the about-to-be-released ANSI standard, you’re going to have to go back and justify why you did these things. The advantage is now you’ve protected from loss of knowledge through attrition and have the ability to understand from the documented risk assessment what the reasoning was for these programs; it really created a standard that people could implement.

 How is the proposed NSF-IPEC standard compatible with FDA’s expectations and with other agency guidance? 

 In terms of pharmaceutical quality systems, I think there is a lot of compatibility between the standards that are like the ICH guidelines and the approaches that are being recommended in those guidelines and the ANSI NSF 363 standard because you are talking about applying risk-based approaches, establishing quality management systems, and emphasizing the importance of senior management responsibility, which is really part of building the quality culture within an organization. If your senior management doesn’t support it, then, certainly, it’s not going to be supported throughout the organization. In terms of the types of practices that we’ve been trying to encourage finished dosage form manufacturers to apply, we’re seeing a lot of progress in terms of building the same type of approaches throughout the pharmaceutical supply chain, including excipients.  

From a pharmaceutical company perspective, how does the NSF-IPEC standard satisfy the information and documentation that a pharmaceutical company would need?   

 One of the key things is the proposed standard creates a level playing field, which is very important, not just for pharmaceutical companies, but also for excipient manufacturers as well because if there are too many different standards and different expectations, nobody’s expectations are met. The standard creates a clear set of expectations, so everybody’s on the same page as to what is important to the quality of an excipient, which is something very important for a pharmaceutical user.  

 From the perspective of excipient manufacturers, how does the proposed NSF-IPEC standard provide needed flexibility for the excipient manufacturer while providing the needed documentation and information that the excipient user might need in its requirements?

 From my perspective, what the standard allows you to do, using the risk-assessment model, is to describe what you do and to justify it. It allows you to make the same safe product and then add to it some of the quality and consistency requirements needed for drug products and explain that and communicate it in a controlled way because there is a common standard. The excipient manufacturer is not being audited by different standards from the pharmaceutical industry.   

From an excipient manufacturer’s perspective, we have always used risk assessment to make informed decisions, but where the gap was may not have been always documented. For example, we may ask, ‘Why are we doing this?’ The answer may be ‘We have always done it this way. We have done it this way for the past 20 years and it has worked well.’ What the standard does is it forces you to look at the quality performance, customer requirements, and the safety of the excipients and document why you are using certain controls or why you may not need certain controls in certain places. There is a large advantage to implementing and having a consistent standard across the board.

 In speaking about risk assessment in general, what constitutes a good risk assessment? Can you provide insight into best practices for risk assessment, and how they can be applied in terms of complying with the proposed IPEC-NSF standard and other measures? 

Risk assessment is going to be quite new to excipient manufacturers. It seems as though it has been rolled out, obviously, in the pharmaceutical industry, but the industry is still wrestling with the proper way to deal with it. There will be an expectation to document a risk assessment because this is a very comprehensive standard, and it’s recognized that you probably won’t run into an excipient manufacturer that has to deal with all the requirements of NSF 363. Those elements that don’t apply to this specific excipient situation or the site of manufacture will have to have a risk assessment to support the fact that those requirements don’t apply. Then, of course, you’re going to have to do risk assessments where the standard calls for a risk assessment to decide the level of compliance with that specific requirement. 

And so, there are basically three elements that I would be looking for in a risk assessment. First, there’s identification. You need a good, solid identification statement for the risk that clearly delineates what the scope is. In this portion, we would expect you to define the harm, meaning the potential harm to the patient if the excipient is exposed to that risk.  There are direct hazards and indirect hazards. Examples of direct hazards are from chemical, physical, or microbiological contamination by exposure of the excipient to the risk. There also are indirect hazards that may become apparent, and they can lead to stability failures. They also may lead to manufacturing problems at the pharmaceutical manufacturer and drug shortages; those are examples of indirect hazards.

The second key element is analysis. We would expect that there’ll be an analysis conducted on the identified risk to determine what is the probability. The probability can be ranked in terms of perception as high, medium, or low, but it also can be classified from a scale of 1 to 3 or even 1 to 10. Then there’ll be an assessment that will determine the probability of the risk and a separate assessment of what is the severity of the risk--what’s the impact if this exposure to the excipient does occur as it relates to the patient and patient safety, which can either be through a direct or indirect hazard. 

Finally, there’s an evaluation. Now that you have the probability and the severity, you combine the two in a fashion that leads to a severity rating for the risk and that will determine the level of protection you need to apply. After you complete the risk analysis and you put in your control measures, you ought to challenge the measures to see if they are effective. There is a need for confirmation of the efficacy of the measures you have put into place.

 Can you discuss how the standards relate to good distribution practices (GDPs)? 

Certainly, from the US, there is the expectation that it is the entire supply chain. You can have the best quality systems in place at the excipient manufacturer, but if there are no controls once the product leaves the door, what good is it, really? All of that is wasted.  

The same expectations and the same core principles exist whether talking about the excipient or the finished drug. On the food side, there’s a new concept, called ‘farm to fork,’ which looks across the entire distribution chain of the food product. We don’t yet have a similar term on the pharma side, but that is absolutely critical and has to exist because of issues such as diversion. While the pharmaceutical manufacturer is ultimately responsible, we all have a part to play. This new focus on risk assessments, on what could possibly go wrong, helps us secure that entire supply chain.  

 I think it’s fair to say that the distribution system is very important when it comes to excipients, and certainly we’ve seen this with finished drug products as well, where within wholesale distribution, for example, things can go wrong. You may have an authorized distributor of record but then you may have other parties that also can get their hands on excipients or drugs in the supply chain. Certainly, it would be a good idea to have some oversight over that part of the supply chain as well and make sure that they’re following the right practices.

I think it’s worth remembering that the shipment of excipients from Point A to Point B is generally from a common carrier. Unless they’re a full truckload, the shipment is going to go by whatever trucking company has been authorized to pick up the shipment. You can audit the nodes, but it’s very difficult to see the transition from Point A to Point B. That puts the onus on the pharmaceutical company to do an adequate job of confirming that the product hasn’t been tampered with prior to its being received at its door. And I think it’s worth pointing out that FDA pushed back on the whole notion of tamper-evident seals, so that if you’re not going to use a tamper-evident seal on an excipient package, you will have to justify why there isn’t one available. So there’s a recognition by the agency that those tamper-evidence seals are important, but if the pharmaceutical companies don’t look for the presence of the proper tamper-evidence seal, what’s the value?

From an excipient manufacturer perspective, can you speak about the issue of risk mitigation in the supply chain from two vantage points: first, the supply chain between the excipient manufacturer to the pharmaceutical user and then the ingredient supply chain for a pharmaceutical excipient beginning with the raw materials for that particular excipient?   

Those are two large questions. With regard to the starting materials for excipients, let’s remember that an excipient that’s used in a drug product will be consumed by the patient. A raw material used in an excipient manufacture will be consumed by the process, go through purification steps, and come out a different material than what you started with; that’s the whole concept of processing. As those materials move through the process, they go from a more industrial setting into a more controlled setting, which implies the necessary controls all the way back to the starting materials. You do need to recognize that the whole business of chemical manufacturing is taking a lesser value product that is a commodity product, doing processing and purification, and turning it into a more value-added product. There has to be thorough risk management, meaning all the appropriate principles go back to the mine, for example, as the source for the material.

As far as the supply chain between the excipient manufacturer and pharmaceutical customer, that is a very interesting issue. Excipient companies prefer to ship full truckloads because it retains supply-chain integrity. Once you ship in less-than truckload (LTL), the shipment will probably dock in an pen area waiting for the next truck. And so LTL shipments are not a good thing. Unfortunately, excipients are used in such small amounts in pharmaceutical manufacturing, they can’t afford a full truckload. It would be the next three-year supply. There is a challenge in that and how you deal with it.  Hence, the need for distributors. An excipient manufacturer needs a good distributor to partner with in the next step, namely, the attachment to the pharmaceutical customers. They play a very valuable role and should be supported on both ends by the suppliers that give products to distributors and the customers that use the distributor. 

 To comment from a process standpoint, I think excipient manufacturers have processes in place to evaluate the risk from all raw materials critical to the quality of the excipient. Implementing the appropriate level of control and procedures to ensure raw-material consistency and quality using a risk-based approach is important. 

Industry experts share perspectives on risk assessment and mitigation in excipient manufacture and the excipient supply chain.

Risk Assessment of Excipients

 production plant in Nantong, China. The company reported in its latest earning report that it broke ground for the new facility in July 2013. The plant will begin commercial production in mid-2014 and employ a workforce of about 300 by 2015. Siegfried is also proceeding with the construction of a new 100-m

 chemical plant in Zofingen, Swizterland. The new building will replace several older plants at the Zofingen site that no longer comply with efficiency requirements and generate high maintenance expenses. The two plants in Nantong and Zofingen are based on an identical technical concept to facilitate product transfers from a regulatory and technical perspective. A new administration building also will be erected in Zofingen. The new offices will be ready for occupation in the second half of 2015. 

Siegfried is proceeding with its expansion in China and Switzerland.