Rita Peters is the former editorial director of 

Pharmaceutical Technology, Pharmaceutical Technology Europe

Rita C. Peters

Single-use systems (SUS) featuring plastic components and materials are widely used in bio/pharmaceutical development and clinical-trial material manufacturing, and are expected to become more common in commercial manufacturing. Drug manufacturers and contract manufacturers favor SUS for the benefits of fast changeover, reduced cross contamination, and manufacturing system flexibility.

	Concern about the potential for contaminants from the plastic materials interacting with the drug, unacceptable extractables data, and a lack of standards for evaluating SUS materials could, however, slow adoption.

	Nearly three-quarters of biopharmaceutical manufacturers surveyed for the 2015 BioPlan Associates industry study (1) identified extractables and leachables as a concern that may limit further use of SUS. The only greater concern was breakage of bags and loss of production material. Concerns about extractables and leachables have been steady during recent years, partially due to the increased use of disposables and increased awareness of the uncertainties about related regulatory issues, according to the report.

	Current good manufacturing practices (CGMPs) require that manufacturing equipment must be constructed so the surfaces that contact components, in-process materials, or drug products “must not be reactive, additive or absorptive so as to alter the safety, identity, strength, quality, or purity of the drug product” (2). For biologic products, “All surfaces that come in contact with products shall be clean and free of surface solids, leachable contaminants, and other materials that will hasten the deterioration of the product or otherwise render it less suitable for the intended use” (3). Similar requirements are in place for the European Union (4).

	Therefore, bio/pharma and contract manufacturers must--using scientific- and risk-based approaches--test the materials and surfaces that come in direct or indirect contact with the API, ingredients, and drug product to demonstrate equipment and process suitability for regulatory filings.

	Extractables studies identify chemicals that migrate from a material when exposed to a solvent at an elevated temperature, generating a worst-case test for contaminants. The data are used to assess toxicities of the extracted chemicals and to assess the potential for leachables--compounds that migrate into a specific drug product or process under normal conditions during the drug product’s lifecycle.

	Some suppliers of manufacturing components and packaging materials provide extractables data that can be used for preliminary screening and risk assessment; however, the information often is not available or sufficient. A complex supply chain, where different parts of an SUS technology may be manufactured or processed by multiple subcontractors at multiple locations, adds uncertainty to the quality and completeness of the data.

	In the BioPlan study, more than 80% of the respondents “agreed” or “strongly agreed” that vendors of SUS should generate and validate extractables and leachables data. The study authors concluded that drug owners believe SUS vendors need to do more testing and analysis of materials used in SUS devices, or they are not comfortable dealing with extractables and leachables issues and defer to suppliers for the testing (1).

	The cost of acquiring data was also considered. Nearly one-third of the respondents said they would not pay SUS suppliers more for extractables and leachables data; 22% said they would pay up to 25% more. The estimated average upcharge was 13.4%. The study authors attributed the drug manufacturers’ price sensitivity to SUS-supplier upcharges for data to general cost-consciousness, increased knowledge about regulatory issues, a better assessment of developing the data internally, and an increasing number of contract service providers offering testing services of extractables and leachables.

	Willingness to pay a markup for data has largely stabilized, the study concludes, although a growing number of drug owners are willing to do their own testing for early-phase development, where data requirements are less stringent.

The lack of sufficient extractables data from suppliers of SUS has spurred activity for standardized testing protocols for these technologies. Representatives of drug manufacturers, testing laboratories, SUS manufacturers and suppliers, independent consultants, and regulatory authorities have participated in discussions, authored position papers, proposed best practices and standards, and developed databases. Often, the proposals conflict on key points; however, the groups are reporting efforts to build consensus.

	The Product Quality Research Institute (PQRI), a collaborative effort of FDA’s Center for Drug Evaluation and Research (CDER), industry, and academia, has published several documents including safety thresholds and best practices for extractables and leachables in orally inhaled and nasal products (5), and a similar publication for parenterals and ophthalmic drug products (6).

	Bio/pharma and medical-device companies formed the Extractables and Leachables Safety Information Exchange (ELSIE) Consortium to compile toxicological data on leachables and extractables to study their impact on drug product packaging, delivery, and manufacturing systems. As of October 2015, the consortium had developed a database of nearly 400 compounds listing chemical, chronic toxicity, mutagenicity/carcinogenicity, reproductive/developmental toxicity, and absorption, distribution, metabolism, and excretion information (7).

	An ELSIE materials working group also piloted an extraction study protocol on polyethylene and polyvinyl chloride that included extraction solvents, extraction techniques, and a range of analytical techniques. The study investigated whether a reduced number of extraction techniques or a reduced number of solvents could be used to obtain information useful for material selection, regardless of product type (8).

	Trade associations, including the Parenteral Drug Association and the International Society of Pharmaceutical Engineers, also have been active in sponsoring presentations and publishing papers about extractables and leachables testing.

The Bio-Process Systems Alliance (BPSA), a corporate member trade association of component suppliers, systems integrators, users, and testing laboratories, was founded in 2005 to accelerate the adoption of single-use manufacturing technologies. Representing the industry supplier market segment, BPSA has published recommended practices for extractables and leachables testing  and has initiated efforts to standardize testing procedures for other aspects of SUS materials (9).

	The BioPhorum Operations Group (BPOG), which represents the drug-owner segment of the industry, defined a standardized extractables testing protocol for SUS manufacturing systems that covers methods for extractables testing studies, including sample preparation, extraction conditions, and reporting data. The authors, members of the BPOG extractables working group, wrote that a testing protocol, with agreed-upon test methods, would establish common expectations among suppliers, users, and regulators on the type of testing data to be generated. The enhanced data would help users compare components from different suppliers, would assist suppliers in selecting materials that end users need, and would help in controlling product variability (10).

	Following publication of the BPOG paper, BPSA published a perspective article noting a difference of opinions among end-user companies, suppliers, testing laboratories, and standards-writing bodies that must be resolved to achieve a full industry consensus standard (11).

	Representatives of BPSA and BPOG are participating in an ASTM International working group developing practice documents for extractables studies. The extractables test solutions practice will define a standard method to create extraction samples from single-use bioprocess systems using model bioprocess extraction solutions. Data generated from these studies could be used to make risk-based decisions about the potential impact on the API or drug product and the selection of equipment or components. Analysis of extractables test solution will be covered in a separate practice (12).

	ASTM is also developing a practice for testing of leachables for single-use materials that contact APIs, intermediates, or the final drug product. The studies are designed to provide a leachables profile based on testing methodology comparable to extractables studies (13).

12th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production

 Code of Federal Regulations, Title 21, Food and Drugs (Government Printing Office, Washington, DC), Part 211.65(a).
	3. 

, Title 21, Food and Drugs (Government Printing Office, Washington, DC), Part 600.11 (b).
	4. EudraLex, 

EU Guidelines for Good Manufacturing Practice for Medicinal Products for Human and Veterinary Use

 (Brussels, Belgium, August 2014).
	5. PQRI, 

Safety Thresholds and Best Practices for Extractables and Leachables In Orally Inhaled and Nasal Drug Products

, 67 (5) 430-47 (2013).
	7. Extractables and Leachables Safety Information Exchange, online www.elsiedata.org/elsie-database/, accessed Feb. 26, 2016.
	8. A. Teasdale, et al., 

, 16 (3) (June 2015).
	9. BPSA, Technical Guides, Extractables and Leachables, online www.bpsalliance.org, accessed Feb. 26, 2016.
	10. W. Ding, et al, 

, 34 (6) (2014).
	11. BPSA, Toward Industry Standardization of Extractables Testing for Single-Use Systems: A Collective BPSA Perspective, (March 10, 2015) online, www.bioprocessintl.com, accessed Feb. 21, 2016.
	12. ASTM WK43975, “New Practice for Determining and Characterizing BioProcess Extractables from Components, Subassemblies, and Assemblies Used in Single-Use Applications,” ASTM International, www.astm.org (West Conshohocken, PA), accessed Feb. 22, 2016.
	13. ASTM WK48084, “New Practice for Determining and Characterizing Leachables released from Materials used in Single-use Systems under bioprocess operating conditions,” ASTM International, www.astm.org (West Conshohocken, PA), 
	accessed Feb 22, 2016.

When referring to this article, please cite it as R. Peters, "Building Consensus for E&L Testing Standards," 

Articles

Standardized testing protocols are crucial for acceptance of single-use systems.

Building Consensus for E&L Testing Standards

	In a culture driven by rapid advances in consumer electronics-and despite a jump in new drug approvals in the past two years-the pace at which new drugs are brought to market is extremely slow compared with the introductions of technologies in other markets. While consumers camp out overnight to be the first to buy the latest smartphone, patients often wait years for effective therapies.

	Still, bio/pharma companies are making a mark in the global innovation arena. In a compilation of the top innovator companies worldwide, pharmaceutical companies claimed seven spots, an increase from four companies in 2014. In addition, a number of chemical companies that provide APIs, intermediates, or excipients made the list of innovative companies.

	Now in its fifth year, the Thomson Reuters 2015 Top 100 Global Innovators list (1) identifies corporations that successfully invest in R&D, develop protected, commercialized products, and outperform companies with lesser innovation efforts in revenue and R&D spend.

	To select the leading 100 innovative companies, Thomson Reuters analyzed patent and citation data across four criteria: volume, success, globalization, and influence. To qualify, a company must have 100 unique inventions protected by a granted patent over the most recent five-year period. The success criteria measures the ratio of inventions described in published applications to inventions protected with granted patents. The globalization factor evaluates inventions protected in multiple regions: China, Japan, Europe, and the United States. Influence measures the impact of an invention: how often it is cited by other organizations.

When ranked by the number of companies on the list, the pharmaceutical industry trailed only the chemical, semiconductor and electronic components, and automotive segments. Three companies are based in the US; two are based in Germany and two in Switzerland. The award report noted advances in genomics, emergence of targeted therapies, and use of biologics as contributing to a “pseudo rebirth, despite the decline of the Blockbuster drug era.”

	The pharmaceutical companies on the Top 100 Global Innovators list are:

		Abbott Laboratories (US): previous wins in 2013 and 2014

		Bristol-Myers Squibb (US): previous win in 2011

		Johnson & Johnson (US): previous wins in 2013 and 2014

		Novartis (Switzerland): previous win in 2014

		Roche (Switzerland): previous wins in 2011, 2012, 2013, and 2014.

	In addition to the global innovators list, Thomson Reuters compiled a list of the top innovator companies in the Bay Area near San Francisco, CA. Known as a hub for the semiconductor and electronics development, biotechnology and pharmaceutical companies also made a mark, with representation from Alza Corp., Genetech, Gilead Sciences, Rigel Pharmaceuticals, Roche Molecular Systems, Theravance, and XOMA Technology.

Innovation is also apparent in the types of instruments and methods available for today’s bio/pharma research and quality control. In this issue, senior editor Agnes Shanley reviews advances in analytical technologies, methods, and operational practices. Beyond new instrumentation, technology adapted from consumer electronics-such as wireless communications and handheld devices-are shaping the way drugs are manufactured and monitored.

	With two major trade shows and conferences for analytical research on the horizon-Pittcon in Atlanta from March 6-10 and Analytica in Munich, Germany from May 10-13-the bio/pharma industry can expect new technology introductions from instrument vendors over the next few months. Perhaps these new tools can further accelerate bio/pharma innovation, and cut the wait times for patients seeking cures and treatments.

:
	When referring to this article, please cite it as R. Peters, “Innovating for Innovation," 

Suppliers must develop new technologies to drive the bio/pharma innovation engine.

Innovating for Innovation

Mergers and acquisitions have changed the shape of the contract services market as big players seek to build full-service capabilities. A review of transactions--as reported in company press statements--highlights some recent shifts in drug discovery, development, and manufacturing services.

	Consolidation of the contract service market continued in the past 12 months, as service providers expanded capacity and filled gaps in their portfolios.

	“Ongoing consolidation enables major pharmaceutical companies to optimize their supply networks and source a greater range of services and technologies from fewer partners,” said Elliott Berger, vice-president of global marketing and strategy at Catalent Pharma Solutions (1).

	“The increased bandwidth, capacity, and capabilities, together with an expanded regional and/or global presence, are valuable to biopharma companies. Improved economies of scale and a simplified supply chain are also important benefits,” said Michael Lehmann, president, global PDS and executive vice-president global sales & marketing, Patheon (1).

	A “one-stop-shop” service offering is a popular theme among large contract research, contract development, and contract manufacturing organizations (CRO/CDMO/CMO). Acquisition efforts are geared to fulfill this strategy, as contract service providers seek to fill gaps in their research, development, manufacturing, or geographic capabilities.


	In September 2015, Pfizer acquired Hospira’s One 2 One contract development and manufacturing services for injectable drugs as part of the merger of the two companies. Fareva acquired an API manufacturing site in France from Merck.

	Patheon added API development and manufacturing capabilities, including high-potency and controlled substances, with the acquisition of IRIX Pharmaceuticals in April 2015. In March 2015, the company acquired Agere Pharmaceuticals, a CDMO that specializes in improving bioavailability.

	Also in March, Catalent Pharma Solutions acquired Pharmapak Technologies Pty Ltd., a packaging business based in New South Wales, Australia to provide regional packaging capabilities and complement the company’s existing facility in Braeside, Victoria.

	With the acquisition of Coldstream Laboratories in January 2015, Piramal added clinical and commercial sterile injectable manufacturing capabilties.


	Albany Molecular Research Inc. (AMRI) completed multiple acquisitions in 2015. In January, the company acquired Aptuit’s Glasgow, UK, business, adding capabilities in sterile injectable drug product formulation and clinical-stage manufacturing. AMRI also acquired Aptuit’s SSCI/West Lafayette, IN facility, adding expertise in material science and analytical testing capabilities for peptides, proteins, and oligonucleotides. In July 2015, the company acquired Gadea Pharmaceutical Group, an APIs and finished drug product manufacturer in Valladolid, Spain. In December, AMRI acquired Whitehouse Laboratories to augment the company’s discovery, development, and manufacturing services.

	Charles River Laboratories expanded its endotoxin and microbial detection services in July with the acquisition of Celsis, a manufacturer of rapid bacterial detection systems. In November 2015, it acquired Oncotest GmbH, a Freiberg, Germany-based CRO that provides discovery services for oncology. In January 2016, Charles River acquired WIL Research, adding new specialty services in safety assessment, bioanalysis, and CDMO services.

	Xcelience had a busy year. In July 2015, the company added particle-size control solutions by investing in Powdersize, a Pennsylvania-based company specializing in milling, micronization, and powder size. In October, Xcelience opened a 71,000-sq-ft headquarters to house preformulation and formulation development labs and suites, and analytical and stability services. Then, in January 2016, Capsugel acquired both Xcelience and Powdersize and integrated the companies into its Dosage Form Solutions business unit.

	Ropack purchased two pharmaceutical facilities formerly operated by Forest Laboratories in Long Island, New York, adding 213,700 square feet  of research and development, formulation, lab analysis, and commercial and clinical manufacturing capabilities to the company’s solid oral-dosage packaging and clinical study distribution offerings.

	Abzena acquired PacificGMP, a San Diego-based CDMO, in September 2015, to provide additional support for the development of products based on the company’s proprietary protein engineering and bioconjugation technologies. In August 2015, Hepalink USA acquired Cytovance Biologics, a biopharmaceutical CDMO.

	Evans Analytical Group (EAG), an independent laboratory network, announced in July that it acquired Analytical Bio-Chemistry Laboratories (ABC Laboratories) of Columbia, MO. ABC Laboratories offers development and cGMP and good laboratory practice-compliant testing capabilities.

	In December, SGS added chemistry and microbiology testing services in Canada-including elemental impurities analysis, tablet dissolution, and bacterial identification-with the acquisition of Quality Compliance Laboratories.


	In December, Quotient Clinical acquired contract development company Co-Formulate Limited to extend its existing pharmaceutical development capabilities across solid, semisolid, and liquid formulations. Co-Formulate is based adjacent to Quotient’s GMP facility in Nottingham, UK.

	Hovione acquired a formulation facility adjacent to its current process chemistry and particle engineering facility in Loures, Portugal to boost development and manufacturing capabilities for inhalation and oral dosage forms.

	BASF stepped away from the custom synthesis business and parts of its API business in October 2015 with the sale of those assets to Siegfried Holding AG.


	In January 2016, Lonza announced the expansion of mammalian production capacity at its Slough, UK facility including the installation of two 1000-L single-use bioreactors. The site provides cell line construction, process development, and clinical manufacturing services for mammalian-derived biotherapeutics.

	Vetter announced in September 2015 that it will invest $335 million to expand and upgrade its manufacturing facilities over a five-year period. Expansion of three sites in Germany will add capacity for logistic services and drug-product manufacturing using an improved system for aseptic processing.

	In August 2015, Mayne Pharma announced plans to invest $65 million to expand facilities and equipment at its site in Greenville, NC. The plans call for construction of a 126,000-sq-ft, large-scale oral-dose manufacturing facility, along with the repurposing of existing space to expand contract services.

	Baxter International’s BioPharma Solutions business completed a 1800-square-meter capacity expansion designed for oncology drugs at the company’s fill/finish contract manufacturing facility in Halle (Westfalen), Germany, the company announced in November 2015. The facility includes innovative disinfection systems and an optimized layout to improve efficiency, prevent contamination, and keep potential losses on the filling line to a minimum. The ongoing development of the Halle facility is the latest in a series of expansions at Baxter, including the addition of a new packaging line in 2013.

	Ajinomoto Althea is expanding its existing biological drug product manufacturing operations to include highly active materials, such as antibody-drug conjugates (ADCs), the company announced in October 2015. The new facility will include areas dedicated to bioconjugation, formulation, purification, quality control, and aseptic fill/finish, including lyophilization.

	In March 2015, WuXi PharmaTech announced plans to build a 145,000-square-foot cGMP facility in Philadelphia, PA for the manufacture of cell therapy products that contain viral vectors. The company also announced in April 2015 construction on a $150 million biologics manufacturing facility in Wuxi City, China. When complete in January 2017, the facility will house 14 2000-L disposable bioreactors for fed-batch cell culture and two 1000-L bioreactors for perfusion runs. The facility will also be built to run continuous or semi-continuous manufacturing processes in addition to traditional fed-batch and perfusion modes.

:
	When referring to this article, please cite it as R. Peters, “Under New Ownership: Consolidation Reshapes Contract Services Market," 

Pharmaceutical Technology Partnerships in Outsourcing Supplement

Mergers and acquisitions have changed the shape of the contract services market as big players seek to build full-service capabilities.

Under New Ownership: Consolidation Reshapes Contract Services Market

	With a flurry of activity in the last two months of the year, FDA approved 45 novel new drugs in 2015 (1), the highest number of approvals since 1996 and second-highest ever (2). “But far more important than quantity is quality-and the valuable new roles many of these drugs can serve in advancing medical care and the health of patients,” said John Jenkins, director of FDA’s Office of New Drugs in the Center for Drug Evaluation and Research (CDER) (3).

	The agency approved 87% of the applications on the first cycle of review and met or exceeded the goal dates under the Prescription Drug User Fee Act for all but two of novel new drugs approved. FDA’s expedited pathways for drug approval again proved successful in 2015:

		Fourteen drugs were designated by CDER as Fast Track, with the potential to address unmet medical needs.

		Ten drugs were designated as Breakthrough therapies, with preliminary clinical evidence demonstrating that the drug may result in substantial improvement on at least one clinically significant endpoint over other available therapies.

		Twenty-four drugs were designated Priority Review, in which CDER determined that the drug could potentially provide a significant advance in medical care and set a target to review the drug within six months instead of the standard 10 months.

		Six drugs received early approval under the Accelerated Approval program, which allows early approval of a drug for a serious or life-threatening illness that offers a benefit over current treatments.

		In addition, 16 new drugs (36% of those approved) were identified by CDER as first-in-class, with mechanisms of action different from those of existing therapies, and 21 new drugs (47% of those approved) were approved to treat rare or “orphan” diseases that affect 200,000 or fewer Americans.

30 novel new therapies reported previously

 (4), the following new drugs were approved by FDA between Nov. 1–Dec. 31, 2015:

		Zurampic (lesinurad) from Ardea Biosciences to treat high blood uric acid levels associated with gout

		Uptravi (selexipag) from Actelion Pharmaceuticals to treat pulmonary arterial hypertension

		Bridion (sugammadex) from Organon USA to reverse effects of neuromuscular blocking drugs used during surgery

		Alecensa (alectinib) from Alexion Pharmaceuticals to treat ALK-positive lung cancer

		Kanuma (sebelipase alfa) from Alexion Pharmaceuticals to treat patients with lysosomal acid lipase (LAL) deficiency

		Empliciti (elotuzumab) from Bristol-Myers Squibb to treat people with multiple myeloma who have received one to three prior medications

		Portrazza (necitumumab) from Eli Lilly to treat patients with advanced (metastatic) squamous non-small cell lung cancer who have not previously received medication specifically for treating their advanced lung cancer

		Ninlaro (ixazomib) from Millennium Pharmaceuticals to treat people with multiple myeloma who have received at least one prior therapy

		Darzalex (daratumumab) from Janssen Biotech to treat patients with multiple myeloma who have received at least three prior treatments

		Tagrisso (osimertinib) from AstraZeneca to treat certain patients with non-small cell lung cancer

		Cotellic (cobimetinib) from Genentech to be used in combination with vemurafenib to treat advanced melanoma

		Genvoya, a fixed-dose combination tablet containing elvitegravir, cobicistat, emtricitabine, and tenofovir alafenamide, from Gilead Sciences for use as a complete regimen for the treatment of HIV-1 infection in adults and pediatric patients 12 years of age and older

		Nucala (mepolizumab) from GlaxoSmithKline for use with other asthma medicines for the maintenance treatment of asthma in patients age 12 years and older.

, online accessed Jan. 5, 2105.
	2. FDA, 

Summary of NDA Approvals & Receipts, 1938 to the present

, online  accessed Jan. 5, 2015.
	3. J. Jenkins, 

2015: Another Strong Year for Patients in Need of New Drug Therapies

, online, accessed Jan. 5, 2015.
	4. C. Challener, 

FDA approved 45 novel new drugs in 2015, the highest number of approvals since 1996 and second-highest ever.

Expedited Approvals and Orphan Drugs Dominated 2015 Novel New Therapies

	Bio/pharma industry headlines in 2015 reflected the positive (moredrug approvals and the first US-approved biosimilar); the negative (inflated drug prices, Martin Shkreli, and tax inversion-driven mergers); and the uncertain (multiple mega mergers and FDA initiatives).

	In this issue, the editors look at key industry trends and expectations for the year ahead, including these predictions for future global drug demand.

	Improved patient access to chronic disease treatment and breakthrough drug therapies will help reduce the “medicine use gap” between emerging and developed markets, driving global spending on drugs to grow at a 4-7% compound annual rate over the next five years. Regional economic conditions and healthcare infrastructure, however, will dictate the types of drugs prescribed, number of medicine doses, and ultimately, the volume of pharmaceutical sales.

	By 2020, total patient spending on medicines will be $1.4 trillion, reports the IMS Institute for Healthcare Informatics (1); however, the global spending increase from 2015 to 2020, estimated to be 29-32%, is below the 35% increase of the prior five years. 

	Global medicine use will reach 4.5 trillion doses in 2020, the study predicts, up 24% from 2015. Emerging markets will account for most of the increase, led by India, China, Brazil, Indonesia, and Africa. Generic drugs, non-original branded drugs, and over-the-counter products will account for 88% of total medicine used in emerging markets, the report says. More than 90% of the prescription drugs filled in the US in 2020 will be generic drugs, up from the present level of 88%.

	Brand spending in developed markets is expected to reach up to $590 billion, a 34% increase in spending over 2015 on an invoice price basis, thanks to new product launches, and price increases in the United States--which may be offset by discounts and rebates. Invoice price growth, which does not reflect discounts and rebates received by payers, is expected to continue at historic levels during the next five years; however, competition and payer resistance will keep net price increases to 5-7% annually. 

	Spending growth will be curbed by patent expiries, which will result in $178 billion in reduced spending on branded products, including $41 billion on biologics, as biosimilars become more widely adopted. 


	Global spending on specialty medicines used to treat chronic, rare, or genetic diseases is expected to reach 28% of the total spending by 2020. The report estimates that more than 225 medicines will be introduced by 2020, with one-third focused on treating cancer; other development areas are hepatitis C, autoimmune disorders, heart disease, and rare diseases. Adoption of specialty medicines will be most prevalent in established markets. 

	“During the next five years, we expect to see a surge of innovative medicines emerging from R&D pipelines, as well as technology-enabled advances that will deliver measurable improvements to health outcomes,” said Murray Aitken, IMS Health senior vice-president and executive director of the IMS Institute for Healthcare Informatics, in a press statement. “With unprecedented treatment options, greater availability of low-cost drugs and better use of evidence to inform decision making, stakeholders around the world can expect to get more ‘bang for their medicine buck’ in 2020 than ever before.”

:
	When referring to this article, please cite it as R. Peters, "Global Drug Directions," 

Infrastructure and payer decisions will determine drug choices in emerging and developed regions.

Global Drug Directions

	The open road can symbolize the freedom to explore, access to a destination, or a solid infrastructure. Signs point travelers in different directions and warn of hazards. As the bio/pharma industry embarks on its journey through 2016, there are signs to observe and consider, traffic and potholes to avoid, and decisions to make about the best route forward.

	In the past 20 years, bio/pharma companies enjoyed smooth travels as blockbuster drugs dominated the market, slowed for warning lights as the patent cliff approached, and in some cases, detoured from existing R&D programs to seek alternate, more profitable routes. Counterfeit drugs and drug shortages disrupted the delivery of safe, effective therapies to patients. Some research projects and unprofitable drugs were abandoned along the way. Oversized, inefficient research, development, and manufacturing engines were traded in for more streamlined and less costly models.

	In 2014, FDA’s Center for Drug Evaluation and Research (CDER) approved a near-record 40 new drugs, and topped that number in 2015 with 45 new molecular entity and new biologic license application approvals (1). These numbers, and types of drugs approved, indicate that the drug-development market may be headed in a new direction, raising questions about the ability of the current R&D and manufacturing infrastructure to adapt to the changing market. While approvals are up, FDA cautions that the number of new drug applications has been flat, indicating the potential of a slowdown ahead.


	Between 2005 and 2009, in what KPMG called “the end of the blockbuster era,” FDA approved an average of 22 new molecular entity drugs per year, a drop from an average of 31 approvals per year from 1996 to 2004. From 2010 to 2014, the number of approvals rebounded back to historical averages. Promising late-stage pipelines may generate 40 approvals per year from 2015 to 2020, KPMG reports, ushering a “breakthrough innovation era,” marked by the need to balance a rebound in innovation with more limited internal and external spending (2).

	Many of the new molecular entities-41% of the approvals in 2014 and 47% of the approvals in 2015-were for rare diseases that target smaller patient populations and, therefore, require smaller quantities of drug doses required compared to blockbuster drugs. This shift in production requirements--combined with lower profit margins for former blockbuster brand drugs now prescribed as lower-cost generic drugs--has implications for drug development and manufacturing processes.

	FDA’s expedited pathways for drug approval have proved successful; 60% of the 2015 approvals were designated in one or more of the expedited pathways (fast track, breakthrough, priority review, and accelerated approval). While this faster route to market of needed therapies is good news, FDA’s inspection process, and the inability of drug manufacturers to accelerate production timeframes, are potential roadblocks. John Jenkins, director of CDER’s Office on New Drugs, reported at the FDA/CMS Summit in December 2015 that manufacturing and inspections--not clinical development--are often the “rate-limited steps” for expedited approval.


	Also in December, CDER Director Janet Woodcock told participants at the Winter Meeting of the Center for Structured Organic Particulate Systems (C-SOPS) that breakthrough drugs will push manufacturing processes to work faster, and clinical implications will lead to manufacturing changes. Technology advances such as continuous manufacturing, 3-D printing of drug doses, and compact manufacturing units that can be located where geographically needed are potential alternatives to aging, unreliable manufacturing processes. New technologies also are required for rapid manufacturing to meet the nation’s needs during terrorism or epidemic threats, Woodcock said.

	Attractive credit terms in recent years prompted some bio/pharma manufacturers to invest in facilities and equipment. Encouraging companies to make capital improvements to avoid future quality and manufacturing potholes, however, can be a tough financial and regulatory road to travel.

	In a 2015 survey of 100 executives from top bio/pharma companies (3), less than half said they planned to increase investments in late-stage R&D. Instead, marketing/distribution (79%), drug discovery/early stage R&D (70%), clinical trials (60%), technology acquisition (59%), and patenting (50%) were higher investment priorities.

	To encourage manufacturers to adopt new production technologies, FDA issued a draft guidance document (4) in December 2015 that provides a framework for drug manufacturers and FDA to discuss manufacturing design and development issues early in the process. The goal is to educate FDA staff about the new technologies in advance of chemistry, manufacturing, and controls (CMC) submission, thereby expediting the approval process.


	FDA plans to use quality metrics to develop risk-based inspection scheduling of drug manufacturers; to improve its ability to predict and mitigate drug shortages; and “encourage the pharmaceutical industry to implement state-of-the-art, innovative quality management systems for pharmaceutical manufacturing” (5).  After publishing the draft guidance document in July 2015, the agency sought formal comments, and bio/pharma manufacturers, contract service providers, and industry associations responded in force. Comments reflected concerns about how FDA will use the reported data to guide further regulatory action, what players in the supply chain were responsible for reporting to FDA, how the data would be interpreted to assess overall product quality, and factors used to determine the success of a quality program.  A key issue was the perceived burden and additional resources needed to perform quality testing.


	In 2015, bio/pharma companies and contact service organizations actively repositioned their business profiles though mergers, acquisitions, and collaboration agreements, as well as divestitures of specific product lines or business units. 

	Senior executives of large biotechnology and pharmaceutical companies surveyed by ReedSmith (3) plan to stay on the investment track; 94% plan to initiate an acquisition over the next 12 months; more than one-third plan to divest assets. The search for external opportunities was a priority; more than half of the respondents said they are planning peer-to-peer research partnerships; 85% report that they plan to hire a contract research organization.

	More respondents (74%) said major pharmaceutical producers would target companies with strong drug discovery or early-stage R&D potential versus companies involved in late-stage R&D (69%). Companies focused on personalized medicine or diagnostics were expected to be popular targets by 70% of those responding.  Less than 30% predicted companies will look to build on their own areas of expertise through acquisitions; 58% said major pharmaceutical producers will seek companies outside their current areas of expertise (3).


	For the past six years, Deloitte and GlobalData analysts examined R&D results for the top 12 publicly held, research-based life science companies (measured by R&D spending in 2008-2009); in 2015, four mid- to large-cap companies were added to the study. Analysis of the pharma industry’s performance in generating return on investment in new drug development revealed a continuing pattern of declining returns, from 10.1% in 2010 to 4.2% in 2015. While the cost to develop an asset increased 33%, from $1.188 billion in 2010 to $1.576 billion in 2015, the average peak sales per asset dropped 50%, from $816 million in 2010 to $416 million in 2015. The numbers, the report authors say, “do not add up for life-sciences R&D to generate an appropriate return” (6).

	There was some good news; the mid- to large-cap companies outperformed the top 12 publicly held companies, indicating that different R&D business models could produce better results. 

	Despite the decline in return on investment, the companies in the study continued to increase investment in R&D as a proportion of cash generated, from 25.5% in 2004 to 29.4% in 2014. Investors, however, seek returns. Companies are more likely to return cash to shareholders via dividends and share buybacks than they are to invest in acquisitions, product licenses, and internal R&D, the study concludes.

	At larger R&D companies, legacy infrastructure, which may be difficult to improve, and excess overhead are major contributors to R&D costs. The smaller companies in the study did not have the large infrastructure, but risk becoming too complex and lose their R&D productivity advantage as they grow. Both groups must challenge additional investments at each phase and evaluate returns for each asset, the study reports. 

	The authors suggest that focusing R&D efforts on stable therapy areas and specialty therapeutics will add to scientific, regulatory, and commercial value propositions. Agility, flexibility, and a focus on science will allow external sources of innovation to be optimized. Reducing development complexity by streamlining functions and addressing unproductive infrastructure can improve returns.


	Early indications are for mergers and acquisitions activity to continue in 2016, and prospects for new drug approvals also are strong. FDA has a busy agenda of legislative approvals ahead, complicated by an election year. Among these distractions, the industry must drive ahead to seek shareholder value and affordable, effective patient therapies on the same route.


	1. FDA, Novel New Drugs Summary 2015, online, www.fda.gov/Drugs/DevelopmentApprovalProcess/DrugInnovation/ucm474696.htm, accessed, Jan. 5, 2016.
	2. B. Shew and P. Gilmore, 

Life Lines: Life Sciences M&A and the Rise of Personalized Medicine

Advancement of Emerging Technology Applications to Modernize the Pharmaceutical Manufacturing Base Guidance for Industry

, Draft Guidance (Rockville, MD, December 2015).
	5. FDA, 

Request for Quality Metrics Guidance for Industry

, Draft Guidance (Rockville, MD, July 2015).
	6. Deloitte Centre for Health Solutions, 

Measuring the Return from Pharmaceutical Innovation 2015

When referring to this article, please cite it as R. Peters, " Bio/Pharma Navigates New Routes to Drug Development," 

Amid corporate restructurings, regulatory initiatives, and aging R&D assets, will drug development accelerate or stall in 2016?