Sean Milmo is a freelance writer based in Essex, UK.

Sean Milmo

Continuous processing in pharmaceutical production has been making only small inroads into Europe's drug sector, which continues to be dominated by batch-manufacturing systems. However, the introduction of continuous technologies is gaining momentum in the region primarily due to R&D schemes backed by public-sector funds. Attention is shifting from relatively small-scale continuous processes, particularly in areas such as tableting and coatings, to concepts in which the production of intermediates or even of the whole drug is transferred from batch to continuous manufacturing. 

"The uptake of continuous technologies has been relatively slow because it requires a complete rethink of the whole production process," says Paul Hodges, chairman of NiTech, an Edinburgh-based startup in continuous-flow technology, who also runs the  chemicals consultancy International eChem, London. 

"To gain the full benefits of continuous processing, plants and their adjacent facilities need to be redesigned, otherwise the big advantages of lower capital costs will not be realized," he explains.  "In comparison to batch production equipment, the continuous-manufacturing unit is much smaller but also much less space is needed for storage and logistics." 

The largest European R&D scheme in continuous processing in pharmaceuticals and chemicals is a four-year €30 million (approximately US$39 million) public–private project in Leverkusen, Germany, called the Flexible, Fast and Future (F3) Factory. The project is backed by the EU and 25 other partners, including Bayer, AstraZeneca, and Proctor & Gamble.  

Among other smaller, mostly national R&D projects covering continuous processing is La Maison Europeenne des Procedes Innovants (MEPI) in Toulouse, France. 

The F3 Factory scheme is developing "smart-scale" plants consisting of individual modules that can be assembled in container frames in central workshops. They will then be transported to production sites to be connected together to form a single plant. 

The partners in the project believe that the modular system eliminates many scale-up problems because the design of the equipment in each module for commercial production will be similar to that used during the laboratory development stages. 

"The F3 project is so important because it provides an opportunity for a complete redesign of  the process engineering in plants so that they can be switched to a total continuous system for the production of pharmaceuticals and certain chemicals," says Hodges. "Instead of adopting the traditional evolutionary strategy of incremental improvements to processes, this is taking a revolutionary approach." 

AstraZeneca is using the F3 scheme to develop a continuous-manufacturing system for making a range of pharmaceutical intermediates through to the final synthesis stage of active ingredient production.  

The company believes that a continuous processing capability in the production of new materials in the 10- to 100-L scale for toxicological studies will result in the quicker  assessment of new compounds, more flexibility, and lower costs than traditional batch-processing equipment. 

A case study, headed by Bayer Technology Service, the engineering arm of the Bayer group, which is coordinating the F3 project, found considerable cost reductions in the modular approach to pharmaceutical intermediates production.  

Transforming a batch to a continuous process could achieve 10 to 25% cuts in operating costs and around 20% in investment costs, according to the study. But if the shift to continuous production also involves fewer processing steps, the total reduction in costs could be as high as 60%. 

In a partnership with Technische Universitat (TU) Dortmund, which has one of the biggest chemical engineering departments in Europe, Bayer has just opened with the help of German government funds, a research center in Leverkusen called INVITE for the testing of modular processes. 

"In the initial stages of development the modular methodology has shown itself to have clear chemical as well as cost advantages because it provides more efficient reactions with more effective heat exchange and better control," says Wolfgang Plischke, management board member at Bayer responsible for innovation, technology, and environment. "Now we need to standardize the equipment and its components so that the system can be used widely." 

Standardization could be a complex, lengthy procedure because of the necessity to involve both drug and other manufacturing companies and equipment makers. Continuous processing may take several more years to become firmly established in Europe's pharmaceuticals sector but  at least it now has a technological platform for its advancement in the region. 

Sean Milmo is a freelance writer based in Essex, UK

Articles

The European Union market takes steps toward continuous processing and modular facilities.

Report from Europe

Foreign bio/pharmaceutical companies, including many of the leading global players in patented and generic drugs, are starting to invest heavily in Russia under the expectation that the country will remain one of the world's fastest growing drug-manufacturing markets. Bio/pharmaceutical sales are increasing at around three times faster than the country's GDP.  By 2016, total revenue in the Russian bio/pharmaceutical market is forecast by market researchers Frost & Sullivan to reach more than $37 billion—that's 2.4 times higher than 2009 levels and equivalent to an annual growth rate of 13.5%.  

The Russian government is hoping that investments by multinational drug companies will help modernize drug production in the country. The government wants the Russian bio/pharmaceutical sector to reach Western standards of drug manufacture and innovation, which the industry has a long way to go to achieve.  

The latest government initiative has been the launch of a state fund that will invest jointly with foreign sovereign wealth and private equity funds as much as $50 billion in priority areas such as bio/pharmaceuticals and healthcare. This money will supplement 120 billion RUB ($3.7 billion) of state money announced late last year under the country's Pharma 2020 program. Those funds will be allocated to upgrading bio/pharmaceutical manufacturing, including the introduction of new production technologies in more than 160 facilities. 

The initial aim behind the Pharma 2020 strategy is to raise the share of domestic production in Russia from a meagre 20% of total drug sales to 50%. A separate goal aims to increase domestic production of vital medicines to 90% by the end of the decade. 

Prime Minister Vladimir Putin has warned that restrictions will be imposed on multinational manufacturing firms, now comprising most of the top 10 drug suppliers in the country, if they do not set up local production facilities and transfer their technologies into Russia. 

"The Pharma 2020 goals can be achieved only if the domestic bio/pharmaceutical industry becomes innovative through partnerships with international pharmaceutical companies and Russian academia," says Oleg Korzinov, director of the Center for Development at the Moscow-based bio/pharmaceutical Cluster Northern, the country's first innovative pharma cluster.  

The drugs of international bio/pharmaceutical companies with a local manufacturing presence are likely to be favored by an expanded state-reimbursement scheme covering high-cost therapies. "A local plant will be the entry ticket into the Russian market and an improved healthcare system," explains Martin Schlow, a Russian pharmaceuticals specialist at the management-consulting firm PricewaterhouseCoopers (PwC). 

As a result, there have been a series of recent announcements by top global players, including Novartis, AstraZeneca, GlaxoSmithKline, and Pfizer, about investing in manufacturing and R&D projects in the country. In addition, leading generic-drug producers such as Dr. Reddy's Laboratories and Teva Pharmaceuticals are strengthening their Russian manufacturing capabilities. 

The Russian government initially expects foreign companies to help bolster innovation in drugs but ultimately wants those companies to assist in giving the country a platform for becoming a major producer of APIs.   

Establishing such a position will be a big task because currently only 15% of APIs in medicines on the Russian market are made in the country. More important, only 10% of the country's 400 bio/pharmaceutical plants comply with GMP standards.  

Many of the multinational companies setting up plants in Russia are using centralized API production. "Due to reasons of economies of scale, all active pharmaceutical ingredients will continue to be manufactured at our large active ingredient plants in Denmark," explains Mike Rulis, head of communications at Novo Nordisk, the Danish insulin maker, which is building an insulin plant in Russia's Kaluga region. 

The largest barriers to API production in Russia include a "lack of a long tradition of API exports, absence of binding rules pertaining to approval of the production and the quality control of drugs [and] a low level of training of specialists in international requirements like GMP," says Monika Stefanczyk, head pharmaceutical market analyst at PMR, a market researcher in Kracow, Poland.  

Nonetheless, PMR believes that with the aid of the Pharma 2020 program and a new law-making GMP certification that becomes obligatory by 2014, Russia has the potential to become an alternative center to China and India for API production. 

Progress will depend on how long Russia takes to establish a thriving bio/pharmaceutical manufacturing market, which currently is relatively small in per capita terms. "The limited affluence of Russian society restricts drug consumption and this is not expected to change in the near future," says Dominika Grzywinska, a Frost & Sullivan research analyst.  

Russia is aiming to provide an alternative to China and India for drug manufacturing, including APIs.

Report from Russia

Three years after first being drafted,  new regulations on combating the growing menace of fake medicines have finally been approved by the European Union. It has involved intense lobbying by trade associations in the sectors most affected by the legislation—the drug manufacturers themselves, producers of active pharmaceutical ingredients (APIs) and excipients, and packaging suppliers.  There are still, however, issues to resolve.  

Many of the details of the legislation, the Falsified Medicines Directive (FMD), have yet to be worked out. The EU legislative body, which consists of the European Parliament and the Council of Ministers, represents the governments of the union's 27 member states. The legislature has decided to delegate the task of finishing the job to the European Commission, the EU's executive body. After that task is complete, any additional details will still have to be approved by the two legislative arms before finalization and implementation can occur.  

"We're pleased with what we have got but we've got reservations about the details because there are a lot of unanswered questions about how the legislation will be implemented," says Tony Scott, adviser to the European Fine Chemicals Group (EFCG), which represents European-based API producers. 

During the next 18 months and before the FMD's implementation, EU states will have to incorporate the directive into their national statutes. Some experts believe that the Commission could take much longer than this allotted timeframe to fill in the gaps, particularly with regard to the new rules regarding APIs and packaging. 

Most APIs used in Europe are imported, mainly from India and China. The European fine-chemical manufacturers failed to persuade the legislators to agree to a mandatory system of official inspections to ensure that API plants comply with GMPs. European API producers have long complained about unfair competition from substandard Asian imports. 

Instead, the legislation makes auditing of API plants by drug manufacturers obligatory. It also requires countries exporting APIs into Europe to have plant-inspection systems and GMP standards equivalent to those in the EU.  

The Commission will have to decide what is "equivalent" and establish a process for verification of equivalence. The legislation appears to be flexible on this matter. It does not lay down, for example, that GMP standards for active ingredients will be the same as those in existing EU regulations. 

 "The Commission will certainly need to consider a transition period for implementation of this provision (on equivalence in standards of API exporting countries)," says Julie Marechal-Jamil, senior manager for quality and regulatory affairs at the European Generic Medicines Association (EGA).

FMD also makes GMP for excipients obligatory. But it has left to the Commission the decision about what GMP standards must be applied. Excipient producers seem confident that the existing GMPs for food production will be permitted. 

With regard to packaging, the legislation stipulates that packaging should enable verification of authenticity, identification of individual packs, and capacity to show tampering evidence. These features would be backed by a pan-European information-technology network that is linked to a central database. 

The exact nature of the safety features and the verification system, including any data-matrix characteristics and the size of the centralized databank, still needs to be finalized. The details are likely to be a controversial because they could trigger costly changes in packaging processes and equipment. 

Already, the generic-drug sector is demanding exemptions from the scheme on the grounds that generic drugs are the least likely to be counterfeited and that producers of high-priced drugs should bear most of the costs of the changes. 

"Manufacturers that have medicines considered at high risk of being falsified should pay (for the costs of the system) by the value of the medicine and not by the volume in the market," says Hugo Carradinha, EGA's senior manager for health economics affairs. 

Tighter supply-chain controls for finished medicines as well as for raw materials will offer new openings to chemical distributors, particularly those adhering to good distribution practice, which is also a requirement of the new legislation. 

"This legislation is a positive development for us," says Michael Cooke, who is responsible for the pharmaceutical sector at Univar, a leading chemicals distributor in Europe. "Traceability will become of even greater importance with pharma customers needing to be assured that suitable GMP standards are applied to all materials. We've invested in creating robust traceability systems." 

Drug manufacturers will be seeking help from suppliers and distributors to reduce the extra costs of the legislation. "Funding of the FMD is a key concern," says Marechal-Jamil. Already, the enforcement of the new regulations faces delays because of a limited budget. Scarcity of funds could be major factor holding up the implementation of FMD as well. 

Member states in the EU are working to implement the newly passed Falsified Medicines Directive.

Analysts have recently downgraded the short- to medium-term outlook of the $3.5-billion pharmaceuticals market in Hungary because of slow domestic economic growth, high unemployment, and, above all, government plans for a 30% cut in state-subsidized drug reimbursements. Prospects for the country as a center for pharmaceutical research and production, however, remain bright. 

 PHOTO CREDIT, STUART WESTMORLAND/GETTY IMAGES			

As Eastern Europe's most advanced pharmaceuticals industry, the Hungarian market has been able to take advantage of relatively high economic growth rates and a strong demand for medicines throughout most of the region, particularly in Russia, which is enjoying the benefits of high oil prices. Hungary began manufacturing drugs more than 100 years ago, and by the time World War II began, the country had created a large drug-manufacturing capacity.  During 40 years of Communist rule, leading up to the late 1980s, the country formed a nucleus of  pharmaceutical production for the entire Comecon trade bloc in Eastern Europe. (Comecon stood for the Council for Mutual Economic Assistance and existed from 1949 to 1991.) 

Hungary's infrastructure and science base has since attracted multinational drug manufacturers, which have been investing heavily in the expansion of the country's production facilities, particularly in the areas of active pharmaceutical ingredients (APIs)  and generic drugs. Among the global players with production facilities in the country are Roche, AstraZeneca, GlaxoSmithKline, Pfizer, Teva, and Novartis. 

Around 75% of the turnover of the industry stems from exports, much of it from generic products. In 2010, total pharmaceutical exports amounted to €2.9 billion ($4.2 billion), that's a 250% increase from 2005. During the same five-year period, imports rose 188% percent to €2.6 billion ($3.7 billion).  

Today, the sector is shifting more toward biopharmaceuticals and other higher value products, particularly follow-on biologics. The strategic change, and resulting innovative products, should help Hungary to be less reliant on Eastern European sales by enabling it to make inroads into the wealthier Western European market. 

Gedeon Richter, which is by far the largest Hungarian-owned pharmaceuticals company and the biggest domestically-owned drug manufacturer in Eastern Europe, has been setting the pace for the sector overall. The company has made acquisitions in Switzerland and Germany, with a focus on gynecology products and oral contraceptives.  

Gideon Richter is also building a follow-on biologics plant in Debrecen in eastern Hungary with the aim of marketing biosimilars in Europe in two years. In late 2010, the company entered into a collaboration agreement with Mochida of Japan on the development and marketing of Richter's follow-on biologics in Japan. 

Approximately 90% of Richter's €992 million ($1.4 billion) sales in 2010 came from abroad, mainly from Russia (22%), Poland, and Romania. The company's approach for remaining competitive in the long term is to maintain a portfolio of high-added value products.  

"We are able to adopt this new strategy because we have the freedom of being an independent company without being owned by an international pharmaceutical company," says Zouzsa Beke, Richter's communications director. "We are also doing it without the backing of a strong government industrial policy like that in other EU countries.  There are R&D incentives from the government but they are not significant, and capital allowances only apply to large investments." 

Some of the Hungarian subsidiaries of international companies, such as Egis, which is  majority-owned by Servier of France, are also planning to enter the follow-on  biologics sector, although not necessarily as producers initially. 

Hungary's National Economy Minister Gyorgy Matolcsy stated last month that the government wants the country to be one of the top 10 leading biotechnology centers in the European Union by 2020–2025.   

However, small biopharmaceutical companies, which make up most of the fledgling biotech sector outside the multinational firms, complain about lack of funds from Hungarian financiers. 

"The few venture capitalists are not interested in biotechnology because they don't understand it, and the banks are even more reluctant to invest in what they see as high risk innovations," explains Zsolt Lisziewicz, chief operating officer of Genetic Immunity, Budapest, a biopharmaceuticals start-up in nanomedicine immunotherapies. "We would like to build a plant in Hungary once we have a commercial product, but we may have to do a NASDAQ floatation to get the funds." 

Hungary, which is outside the euro zone, is still gripped by a credit squeeze after having to be rescued by the International Monetary Fund (IMF) four years ago. With easier access to funds, its pharmaceuticals sector might be performing even better in the European markets. 

Eastern Europe's pharmaceutical leader, Hungary, is working to maintain its number-one status while also pursuing new avenues, especially in biopharmaceuticals.

Report from Hungary

The European Union is making changes to its good manufacturing practice (GMP) guidelines at a pace that is threatening to move the region out of sync with global GMP rules, in particular with the US and Japan. The objective of the changes, put forward by the European Commission, the executive body of the Brussels-based EU, is to help pharmaceutical manufacturers reinforce quality controls over their suppliers, particularly in the area of active pharmaceutical ingredients (APIs). 

The alterations to the EU GMP code (Directives 91/356/EEC, as amended by Directive 2003/94/EC and 91/412/EEC) were originally drafted to support the 2003 EU legislation on GMP for medicinal products and are considered binding on industry. They are largely based on the more recent quality guidelines adopted by the International Conference on Harmonization (ICH).  

Although the ICH guidelines are meant to harmonize practices between the primary member regions (the European Union, Japan, and United States), the European Commission and its regulatory authority, the European Medicines Agency, have been acting ahead of their ICH partners. For example, the Commission recently finalized amendments to its quality risk management of APIs guideline that incorporated principles introduced in the ICH Q9 

. The US and Japan, even though they have published ICH Q9 as a guidance for industry, have not gone as far as updating binding legislation (e.g., the

sections that apply to drug manufacturing) to date.  

In November, the Commission and EMA proposed changes to a chapter in the EU GMP Guide on contract manufacturing to broaden the guideline's coverage of outsourcing activities. The potential changes correspond to language in the ICH Q10 

guideline that was adopted by the three ICH regions in June 2008. The alterations make clear the drug manufacturer's responsibilities for ensuring that quality control systems are in place throughout the supply chain and that suppliers are competent in GMP. 

The Commission also put forward in November suggestions for changes to rules on starting materials which are, at the moment, not covered by any ICH guidelines (ICH Q11, which is still in Step 2 of the harmonization process, may address this topic in part). The suggestions stipulate that all aspects of the production and control of starting materials be documented, that purchasing staff should have a "thorough knowledge of suppliers," and that the suppliers themselves be periodically audited. These modifications, like others proposed by the Commission during the past few months, are now undergoing a consultation period with industry stakeholders. 

"Experience has shown that some manufacturers do not adequately qualify their suppliers, do not have good knowledge of the supply chain or fail to control it properly," says an EMA spokesperson. "Regulators perceive an increasing risk in this area and as the heparin incident illustrates, failures can have disastrous consequences." 

Because the ICH guidelines cover individual aspects of pharmaceutical manufacture, there is no uniform single ICH guideline for GMP for finished products, according to EMA. That said, "....there is pre-existing broad equivalence in requirements," says the EMA spokesperson. "We are in regular contact with our US and Japanese colleagues under different frameworks and do not believe that the changes proposed are inconsistent with existing or planned requirements of those international partners." 

Nonetheless, the divergences are beginning to concern manufacturers of medicines and APIs. "In general, we always advocate that requirements should be harmonized between geographic areas as much as possible," says Chris Oldenhof, president of the Active Pharmaceutical Ingredients Committee (APIC), a branch of the European Chemical Industry Council. 

API producers in Europe are also worried that the scope of the alterations on starting materials could be too broad to be effective. "If the required changes are to apply further upstream to include raw and starting materials throughout the synthesis chain then they will not be realistic," says Oldenhof, who is also manager of external regulatory affairs at DSM (Heerlen, The Netherlands). "It is well-known that unrealistic requirements usually lead to widespread noncompliance and even fraud." 

The European Commission has declined to amend the EU guideline to allow for mandatory GMP inspections by regulatory agencies of API plants, which has been a long-established demand of European API producers. "Without adequate plant inspections, levels of compliance will always be quite low," says Oldenhof. "This is the main weakness of the proposals."  

For APIC and the European Fine Chemicals Group, which also represents API producers, the Commission's suggested changes are welcome overall because they tighten up existing GMP controls in an area in which it is notoriously difficult to enforce regulations.  

 is a freelance  writer based in Essex, UK.

The European Commission and Medicines Agency seem to be moving in advance of their ICH partners to update standards.

Europeans are increasingly viewing collaboration on drug research and development between the public and private sectors as the most effective way to grow their pharmaceutical sector and strengthen their competitive role, particularly against low-cost Asian drug manufacturers. At the national and European Union levels, research and development (R&D) partnerships are being formed between government agencies, academia, and industry to improve the development of new drugs and the processes for making them. 

"There is a bottleneck [in biopharmaceuticals, for example] when it comes to processing large and complex molecules on a scale to meet the potential demand," explains Celia Caulcott, director of innovation and skills at the United Kingdom Biotechnology and Biological Sciences Research Council (BBSRC). "This is an area where there is clear value in bringing together public and private organizations to rapidly improve products, technologies, and processes." 

If collaboration is to work effectively, however, a balance needs to be found between what are often the conflicting interests of universities and research institutes and pharmaceutical companies over issues such as funding and intellectual property (IP) rights. There is also concern among some sections of the research community and in industry that the growing number of projects across the EU will overlap with an already existing plethora of national (i.e., within some EU countries) partnership schemes. 

To date, most of the new initiatives seeking to take advantage of public–private partnerships benefits (e.g., from the pooling of knowledge through collaboration) are already being driven by individual European countries. In the UK, for example, the Bioprocessing Research Industry Club (BRIC), a public–private partnership, has organized 25 biopharmaceutical research projects, 40% of which are already reporting success on the development of new processes, technologies, and products. 

In Ireland, whose pharmaceutical sector accounts for more than 50% of its exports, the government is leading a drive to bring government agencies, industry, and academia together to form new R&D partnerships. The goal is to make the country a global center for advanced production techniques by linking research directly to manufacturing. 

"Partnerships are the way forward for process improvements and development," says Matt Moran, director of Pharmachemical Ireland, an association representing pharmaceutical and chemical manufacturers. "Our members can not only learn a lot from each other and academia but also from other industries. We have to reduce costs and increase efficiency in order to compete against Indian and Chinese producers. There is no alternative to development collaborations as a means of doing this," he says. 

Ireland's Limerick University is heading a research project on solid-state particles in medicines that involves the country's leading universities and global pharmaceutical companies such as GlaxoSmithKline (London), Roche (Basel), Pfizer (New York), and Eli Lilly (Indianapolis). The scheme brings together chemists and other experts in pharmaceutical technology and chemical and mechanical engineering to tackle the problem of the lack of reproducibility of solid-state dosage forms because of inadequate crystallization, phase transformations, and other phenomena. 

At the EU regional level, one of the most prominent collaborations in process development is a €30 million ($38 million) unit at the Bayer group's site at Leverkusen, Germany, which aims to create a modular continuous production plant. Among its 25 partners, in addition to Bayer, is AstraZeneca (London). Another partnership underway at  London's Imperial College is coordinating an EU project involving nine partners from seven countries to develop a new generation of molecular purification technologies for the manufacture of active pharmaceutical ingredients. 

However, the largest EU public-private partnership in pharmaceuticals–the €2 billion Innovative Medicines Initiative (IMI)—has already run into trouble because of disagreements over funding and IP rights among its academic and industrial participants. IMI, which launched its first projects two years ago, has been focusing on small-molecule R&D, but recently its scientific committee called for more attention be paid to biological-production processes. The university and research institute members of IMI complain that academia is being asked to pay too high a proportion of the project's direct costs, and that its industrial partners are being given too generous IP rights. 

"The IMI model in its present form cannot be used as model for future [public-private partnerships] in EU programs," says Linda Polik, head of European research services at Oxford University, one of the IMI academic partners.  

Nonetheless, these types of partnerships and other forms of industrial-academic research partnerships are continuing to gain strong support within the European pharmaceutical industry, particularly as the current economic climate puts pressure on the R&D funds of both the public and private sectors. 

No matter how things turn out, BBSRC's Caulcott says, "This presents us with some great opportunities to work together through joint funding and sharing of knowledge and resources." 

Sean Milmo is a freelance writer based in Essex, UK. 

Public-private R&D partnerships are on the rise across Europe, but national goals and academia-industry competition could prevent their success at the European level.