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

Sean Milmo

European Union leaders seem to have agreed to boost efforts across Europe to establish a strong excipient-certification system. As part of a directive on combating counterfeit medicines that is scheduled to be approved in 2011, the European Commission is likely to be instructed to issue requirements that excipient manufacturers and suppliers adhere to good manufacturing practice (GMP) and good distribution practice (GDP) guidelines.  

PHOTO: NEIL BEER, PHOTODISC, GETTY IMAGES			

In the summer of 2009, the European Commission had decided to exclude excipients from the new directive because it believed the costs of implementing excipient-certification standards outweighed the benefits. At the time, the legislation was expected to focus only on production and distribution of finished medicines and active pharmaceutical ingredients (APIs). 

In the meantime, the International Pharmaceutical Excipients Council of Europe (IPEC-Europe), in partnership with the European Fine Chemicals Group (EFCG) and other trade associations, began to develop Excipact, a voluntary standard that will enable excipient manufacturers and suppliers to obtain quality certificates for their products. Certification would be based on GMP and GDP standards in existing IPEC guidelines and verified by accredited third-party auditors.  

"Excipients need to be appropriately regulated as they are an integral part of a medicinal product," says Alexandra Brand, chairman of EFCG's Excipact global steering committee and global vice-president for pharmaceutical ingredients at BASF (Ludwigshafen, Germany). "We support workable guidelines of regulatory authorities for excipient GMP and GDP which minimize risks without over-burdening industry." 

Excipact's developers would like to see the program expand beyond Europe. IPEC-Americas is therefore working with NSF International, a US standards organization, on a similar standard with the participation of the US Food and Drug Administration. Excipact is expected to be operational next year after a consultation period with various stakeholders. 

Members of the European Parliament and the Council of Ministers, the arm of the EU that represents EU member-state governments, now recognize the importance of subjecting excipients to GMPs and GDPs. The parliament's committee on environment, public health, and food safety (ENVI), the lead committee on the counterfeit medicines directive, rejected claims by the European Commission that the safety of excipients in medicines was not a major issue because there have been relatively few incidents of fatalities from toxic nonactive ingredients. "The consequences of the use of falsified excipients are well documented," says Marisa Matias, ENVI rapporteur on the proposed directive. In their explanation to the amendements, ENVI and Matias referred to the Commission's impact assessment of the proposed directive, which provided details of sharp increases in seizures of counterfeit medicines throughout the EU. Matias also argued that excipients, much like APIs, can be falsified, contaminated, or adulterated, thereby leading to patient deaths. Take for example, the contamination of cough syrup when diethylene glycol was substituted for glycerin, leading to deaths of many around the world in the 1990s and in 2006, or the infant formula in China in 2008 that was contaminated with melamine.  

The committee also suggested that under the directive, the European Commission, in coordination with the European Medicines Agency, be required to publish guidelines for "specific good manufacturing practices for excipients." The Commission would be advised to take into account existing standards on this topic, including IPEC's GMP guideline and the ISO:9001 standard on quality management systems. 

The Council of Ministers did decide late last year that certain excipients "identified on a risk-based approach" should be covered in the directive. In the draft language of the amendments to the directive, excipients are placed on the same level as APIs with respect to GMP and GDP requirements.  

"Ideally, we would like to see the Commission adopt Excipact as its guidelines for GMP and GDP for excipients," says Iain Moore, chairman of IPEC-Europe's certificate project committee and products and quality assurance manager at Croda Europe (Snaith, England). Unfortunately, the commission cannot legally adopt trade associations' guidelines as legal EU standards, but they can cite international standards such as those produced by ISO, said Moore. 

One option may be for IPEC and other trade associations supporting Excipact to start the lengthy process of persuading ISO to adopt it as one of their standards. The more likely option is for the EU to back indirectly the ideas behind it by approving legislation recognizing the necessity for GMP and GDP standards for excipients. Parliament is expected to debate ENVI's proposed amendments at a plenary session this month. 

Articles

Europe moves to place excipient GMP and GDP standards on the same level as active pharmaceutical ingredients.

Report from Europe

European manufacturers of active pharmaceutical ingredients (APIs) have been campaigning for several years without much apparent success for the introduction of mandatory inspections of API plants. Such inspections by the European Medicines Agency (EMA) and the European Union's national regulatory authorities would help ensure manufacturers that they are meeting current good manufacturing practice (CGMP) standards. 

European API manufacturers complain that the lack of proper GMP-compliance monitoring has led to their loss of the market share. Asia, in turn, has reaped the benefits. China and India, specifically, now account for more than two-thirds of the API market (by volume) in the European Union, according to industry sources. 

Representatives of European manufacturers, including the European Fine Chemicals Group (EFCG), believe that legislators finally seem to be paying attention.  

In late 2009, the European Parliament moved to amend a proposed European Union directive tied to the EU Pharmaceuticals Package of 2008 that addresses counterfeit and substandard medicines. The amendment would make it mandatory for EU authorities to inspect API manufacturing facilities with the aim of preventing additional counterfeit and substandard drugs from reaching the market. 

"EU public opinion and politicians are now taking a much greater interest in the issue," says Guy Villax, chief executive of Hovione, a Portuguese API producer, and a member of EFCG's board. "Members of the European Parliament seem to be far more aware of the need for mandatory inspections than the European Commission, the EU executive, which draws up legislation." 

The European pharmaceutical industry is working internally as well to improve API facility audits. The popularity of Rx–360, the recently formed US-based international pharmaceutical supply chain consortium, and its proposed shared-audit information system is growing throughout Europe. 

According to Villax, EFCG feels that the initiatives by regulatory authorities and pharmaceutical companies to collaborate more closely on the inspection of API plants is demonstrating support for its arguments within the sector itself. The proposed amendment, for example, would build upon the pilot project launched in 2008 by EMA, US Food and Drug Administration, and Australian Therapeutic Goods Administration (TGA) to conduct joint GMP inspections of API plants.  

These efforts "are totally in line with our thinking because cooperation provides the better quality information needed to eliminate the fringe of API producers bypassing GMP standards," says Villax.  

Research- and develoment-based manufacturers and generic-drug suppliers agree that substandard APIs can be removed from the market with more effective auditing, particularly by more cooperation between companies. 

Auditing by drug manufacturers as opposed to a full-regulatory GMP inspection, of API manufacturers is already required by EU law. The European Commission would like to ease the burden on manufacturers by allowing third-party audits as long as the auditors are accredited by a regulatory authority in the EU. Unfortunately, the majority of the European Commission's Council of Ministers, the second arm of EU legislature representing the EU's 27 member states, oppose the idea. The Council, according to a November 2009 EC press release, believes third-party audits would dilute the responsibility of pharmaceutical companies. 

"Auditing by pharmaceutical companies, even if it is mandatory, is not sufficient," stresses Villax. "The pharma companies cannot have responsibility for setting standards. There must be a final arbiter of what minimum standards are required. Only regulatory authorities can do that." 

Due to the rising influx of counterfeit medicines in to the EU—at an average annual increase of 10–20% by volume—regulators are beginning to tackle fake drugs as a public health matter. 

"Production facilities of low-price API suppliers [in India and China] are, until now, rarely inspected by EU authorities," says Paolo Russolo, president of Cambrex Profarmaco Milano, a manufacturer of APIs and intermediates, and head of Aschimfarma, Italy's fine chemicals association.  

In discussions regarding the proposed amendment to the EU Pharmaceuticals Package, members of the European Parliament have asked for more emphasis  to be placed not only on the public-health responsibilities of regulatory authorities in fighting counterfeiting but also on the protection of the industry itself. 

"It is important to prevent unfair competition from (non-EU) producers who place APIs on the EU market without them having been properly ascertained whether those producers comply with GMP—this will at the same time serve to protect public health," says Amalia Sartori, rapporteur for the parliament's industry, research, and energy committee. 

The European Parliament is expected to give a first reading of the new legislation and its proposed amendments this spring. The Council of Ministers is also likely to reach an agreement on the controversial directive. European API producers are optimistic that both bodies will support mandatory API-facility inspections. 

Sean Milmo is a freelance writer based in Essex, United Kingdom.

Regulators and industry move to require inspections of API manufacturing facilities.

In the Field: Report from Europe

Ireland's pharmaceutical industry, dominated by affiliates and subsidiaries of US drug companies, is striving to broaden its scope of activities amidst the biggest economic crisis to hit the country for decades. The island kingdom also could now be hit by proposals from US President Barack Obama to restrict tax benefits on foreign earnings of US multinationals, which could curb investment.

Ireland's corporate tax rate of 12.5%, one of the lowest in the European Union, has helped the country attract investment over the past two decades from 17 of the top 20 global pharmaceutical companies. The majority of these investors are based in the United States, including Pfizer (New York), Merck & Co (Whitehouse Station, NJ), and Eli Lilly (Indianapolis). Many use Ireland as a global base for the production of active pharmaceutical ingredients (APIs), biopharmaceuticals, and finished drug products. In 2007, exports of pharmaceuticals and pharmaceutical-related chemicals amounted to approximately EUR 42 billion ($57 billion), equivalent to nearly 48% of the country's total overseas sales and almost double the level of export sales 10 years ago.

Ireland's government is now endeavoring to make its pharmaceutical industry an even stronger force in the global market, despite the ongoing recession.

In response to plummeting tax receipts and forecasts of a 9%-decrease in gross domestic product (GDP) this year, the biggest drop in Europe, Ireland's government has raised taxes and slashed public expenditures. However, to protect its pharmaceutical businesses and its electronics sector, the country's other major source of export revenue, the government has kept the 12.5% corporate tax rate intact. In addition, legislators are pushing forward a policy aimed at giving pharmaceutical companies a broader footprint by strengthening research and development (R&D) activities. The government has raised tax credits on R&D operations from 20% to 25% and made the credit available to all R&D expenditures, not just for spending increases in research. In January 2009, the government also extended R&D tax allowances to cover manufacturing processes as well as product development.

The biopharmaceutical arena is another area of potential growth for Ireland. A government investment program aimed at building R&D infrastructure in Irish universities has recently been expanded to cover biopharmaceutical processes. In addition, IDA Ireland, the country's development agency, has been instrumental in persuading research teams outside Ireland that specialize in glycosylation, a key process in biopharmaceuticals production, particularly of biosimilars, to set up shop in the country. Already, a 10-person team from Oxford University headed by Professor Pauline Rudd, comprises the core of a glycobiology group at the newly established National Institute for Bioprocessing Research and Training within University College Dublin.

"Companies in biologicals in particular have been combining product with process development," explains Barry O'Dowd, head of the life sciences division at IDA Ireland. "Our objective has been to make Ireland more attractive for biologics investment by having a strong academic structure to support it."

More than half of the EUR 1 billion ($1.3 billion) being invested in pharmaceutical projects that are under design or construction in Ireland is in biologics. The biggest investment is a EUR 350 million ($477 million) monoclonal antibody (mAb) facility owned by Eli Lilly, which with the support of local academia, is expected to be a global mAb center of excellence.

Ireland's plans to secure the long-term future of its pharmaceutical industry by giving it more range and depth, however, could be undermined by the US government's proposed cuts in tax benefits for US corporations investing abroad. When giving details of his proposals to restrict tax benefits for US-based companies' foreign earnings, President Obama indicated the objective was to shut down tax havens used to avoid paying taxes in America.

"We don't think the US government sees Ireland as a tax haven," says O'Dowd. "The pharma industry in Ireland is not only important to our country but also to America. We have made significant investments in academic support for areas like glycosylation and are collaborating with US companies in sharing that technology."

Pharma officials in Ireland, therefore, hope that the Obama administration will appreciate the contribution being made by its R&D initiative to new advances in process development. "Major multinationals are dedicating efforts and resources to innovating at the level of the factory [by] bringing the lab into the workplace," says Matt Moran, executive director of PharmaChemical Ireland, the pharmaceuticals sector of the Irish Business and Employers' Confederation (IBEC). "Here lies a huge opportunity for this country to move to center-stage," he concludes.

Despite its shrinking domestic economy, Ireland is determined not to let its pharmaceutical industry fade into the shadow of global recession.

Report From: Ireland

Contract manufacturers in Europe are benefiting from the pharmaceutical industry's acceleration of production reorganization. In an effort to streamline active pharmaceutical ingredient (API) and finished-product manufacturing, large multinational pharmaceutical players are closing down redundant plants and, in many cases, selling facilities to growing contract manufacturers. The contractors, in turn, are establishing themselves as a new class of specialized producers of APIs and dosage-form drugs, working in close partnership with both big and small pharmaceutical companies. 

"The pharmaceutical industry is increasingly outsourcing its API business to custom manufacturers in order to cut costs," says Wolfgang Schmitz, chief executive of Saltigo, the fine chemicals unit of Lanxess in Leverkusen, Germany. "We can win new customers as well as increase capacities for existing companies by offering innovative product mixes and the latest technologies, as well as ensuring high quality and safety standards." 

 Among the main drivers behind plant closures and divestments by pharmaceutical companies is a hike in the number of drugs coming off patent. In the British Isles, for example, GlaxoSmithKline (GSK, London) is closing capacity in England for its epilepsy drug "Lamictal" (lamotrigine ) and herpes treatment "Valtrex" (valacyclovir), both of which have recently or are about to come off patent. In addition, there is a desire among global firms to have a stronger presence in the emerging markets of Asia, Latin America, and Eastern Europe. 

"We're number 2 worldwide with a 6% share of the global pharma market, but in the emerging markets of Brazil, Russia, India, and China (BRIC), we have only 1.4%," said David Jones, GSK's senior vice-president for human resources, global manufacturing and supply, at an early March press briefing. "We have to change the whole dynamics of our business. We'll have to produce more outside Europe and North America in Asia and elsewhere where manufacturing is less expensive."  

One-third of GSK's 30,000-plus workforce operates out of the United Kingdom. In the second half of 2008, the company announced the closure of two plants in southeast England, affecting more than 1000 employees. The company's expenditure on outsourcing of APIs, intermediates, finished products, and packaging now amounts to 55% of the £3.6 billion ($5.1 billion) spent on manufacturing annually. 

AstraZeneca (London), the UK's second largest pharmaceutical company behind GSK, is focusing on formulation and packaging after announcing in 2007 that it intends increase outsourcing of its APIs.   

"We will continue to do formulations and packaging because they are areas close to the patient," says a spokesperson for AstraZeneca, which in January revealed that by 2013, it would be cutting approximately 20% of its global workforce or 15,000 jobs, many of them in manufacturing. "In fact, in packaging in Europe, we are bringing some activities back in house as part of a regionalization process." 

The company has forged close ties and even partnerships with several contract manufacturers across Europe. One of these is the fast-growing Recipharm (Basel), which now has nine plants in Europe, all of them purchased from pharmaceutical companies, four from AstraZeneca. 

"We've been following the classic model of acquiring plants and then doing a contract manufacturing deal with the vendor for the existing output while using the facility to gain other business from elsewhere," explains Mark Quick, Recipharm's vice-president of corporate development. "We see potential this year for acquisitions from our leveraged competitors in contract manufacturing because we have cash in the bank." 

Recipharm is positioning itself as a full-service player able to satisfy the needs of pharmaceutical companies from development to commercialization. "We're taking over plants from the large pharma companies in order to meet the requirement of smaller ones wanting help with the development and manufacture of their products," says Quick. 

Contract manufacturer Hovione, a Portuguese-based API development and manufacturing specialist, has made one of its biggest expansion moves in recent years with the acquisition in November of Pfizer's API plant for Lipitor (atorvastatin) at Loughbeg, Cork, Ireland.  

"Pfizer offered us an agreement for the supply of Lipitor APIs from the plant, but we declined it," says Guy Vilax, Hovione's chief executive. "It's a high quality facility, and we want it to be a center for new API development and manufacture.  

"I think it is clear that the pharma industry is under very severe pressure and that its operating model will have to change quite dramatically with the obvious trend being a desegregation of the three key elements of discovery, sales and marketing and manufacture," he continues. "We're now entering the era of the specialist pharmaceutical manufacturer who will be able to handle everything from clinical trial quantities to bulk production." 

The best-placed contract manufacturers in Europe are likely to be those who are active in biopharmaceuticals, potentially the fastest growing segment for outsourcing and medicinal chemicals. Leading contract manufacturer Lonza (Basel)  reported a 9% rise in exclusive synthesis and biopharmaceutical sales last year, but much of that growth came from the chemicals side. On the other hand, the Swiss company clinched during the year long-term biological manufacturing deals with Novartis (Basel) and Israel's Teva Pharmaceutical Industries. In the coming years, contract manufacturers will need to be able to offset growth in one business against a slowdown in the other.  

Sean Milmo is a freelance science writer based in Essex, England.

Although industry is tightening its belt, contract manufacturers across Europe are actually making out quite well by taking on additional projects and new roles.

Report from: Europe

In terms of numbers of approved drugs on the market, the European Union's four-year-old groundbreaking system for approving drugs similar to already approved biopharmaceutical products would appear to have had little impact to date. The EU amended its legislation relating to drug approvals in 2004 to lay out a legal framework for biosimilars. The European Medicines Agency (EMEA) has since clarified the amendment 

 a series of guidelines. Only five biosimilars, however, are available in the EU market thus far: two are for the human growth hormone somatropin and three are for epoetin alfa as an anemia treatment. 

EMEA gave a positive opinion earlier this year for another four biosimilar drug for filgrastim, a granulocyte colony-stimulating factor (G-CSF) for the hematological disorder neutropenin. The opinions opened the market for biosimilars, which can be commercialized after the brand-name drug's patent expires. 

The European Generic Medicines Association (EGA), representing manufacturers of off-patent drug and a strong supporter of the EU's biosimilars scheme, concedes that it may take another five years to show how successful the EU has been in providing patients with greater access to biopharmaceuticals. 

"Some people may think that the system is slow because there're only five bio-similars on the market at the moment," says Suzette Kox, EGA's senior director for scientific affairs. "In fact, the European system is the fastest in the world. EMEA is first regulatory authority in the world to have a clear legal framework for the approval of biosimilars which ensures that they are products of a very high standard."  

Biosimilars in the EU are different from "biogenerics," which have not been legalized in the region, because they are approved only after meeting rigorous criteria that establish comparability with the innovator drug or reference product. Unlike biogenerics, biosimilar drugs also have to undergo clinical trials to establish comparability and to demonstrate efficacy and safety.  

Regulators have "to know more about the reference product because the biosimilar is better characterized due to the data required," explains Kox. "Data are submitted to the authorities which has never been seen before because of the advanced analytical techniques being applied." 

Nonetheless, comparability is still a big issue in the marketplace. Companies marketing biosimilars want to emphasize their similarity to the original product, and companies promoting the reference products aim to highlight the differences. 

"Biosimilars have demonstrated they have the same efficacy, safety, and quality, but they still may have different side effects, varying levels of concentration, and other differences," says Michael Leader, healthcare director at the European Association of Bioindustries (EuropaBio), representing research-based biopharmaceutical companies. 

EGA has claimed that the marketing activities of companies defending innovator biopharmaceuticals are undermining the expansion of biosimilars, which currently have prices averaging around 20% below those of the reference product. 

"Competitors to biosimilars have been adopting scare tactics," says Kox. "They have tried to weaken confidence in these products. We hear that some doctors have been holding back from prescribing them" as a result. These contrasting attitudes on comparability have been highlighted by differing views on the naming and labeling of biosimilars.  

The EU's reference product producers argue that biosimilars should have a different international nonproprietary name (INN) within the World Health Organization's (WHO) naming system for therapeutic compounds. Because biosimilars are not 100% identical to the original products, they need a distinct INN, according to EuropaBio. 

On the other hand, EGA is pushing for the INN system to acknowledge that the concept of comparability, which is used with original biopharmaceuticals as they go through process changes, be the same as the concept applied to biosimilars. If the concepts were the same, there would be no need for a distinctive INN designation for biosimilars. 

WHO is currently reviewing this particular issue, the outcome of which will be a key component in pending guidelines to regulate biosimilars and biogenerics. The guidelines could determine whether the EU's approval procedure should become the basis for a harmonized global system for authorizing copies of off-patent biopharmaceuticals or whether less strict approaches should prevail. 

Although the European Union's approval rates of biosimilars for market is increasing slower than expected, its approach may provide an example for other foreign markets.

Report From: Europe

The Netherlands is slowly emerging as a frontrunner in Europe when it comes to using public-private sector partnerships to develop and market new drugs. Innovations in manufacturing processes and technologies are also becoming a large part of the Dutch portfolio. 

Approximately €750 million ($1.2 billion) is being set aside by the government, academia, and private companies to help three Dutch companies organize partnership platforms over the next five years aimed at innovating in the areas of pharmaceuticals, biomedical materials, and diagnostics. Another  €310 million ($488 million) in public-private finance is being channeled into exploratory research schemes. 

The three organizations are Top Institute (TI) Pharma for pharmaceuticals, BioMedical Materials for materials, and the Center for Translational Molecular Medicine (CTMM) for diagnostics.  

The latest initiative is the creation of a Life Sciences & Gezondheid, or Health, (LSG) program, backed by the government and industry. LSG aims to play a key role in enabling the Netherlands to double over the next 10 years the size of its life-sciences sector, which currently employs 55,000 and brings in €16 billion ($25 billlion), accounting for 3% of the country's gross domestic product. The program will help small- and medium-sized companies, which comprise most of the 935 companies in the Dutch life-sciences sector, to bridge the investment gap between basic research and later-stage development once investors are willing to provide support. 

"In the Netherlands, the private sector is providing less of the development funds for life-sciences innovations than in other European countries," says Hans van den Berg, executive research and development (R&D) coordination director at Organon, Schering-Plough's Dutch-based subsidiary, and head of the task force behind the LSG program. 

"We are facing an imbalance between the public and private sectors in the Netherlands," he told reporters at a May briefing in Leiden. "That is why we need to build up the strength of the private sector in R&D. Public-private partnerships are one way of doing this." 

LSG will ideally encourage small companies to share research and production equipment. For example, Leiden Bio Science Park, which accommodates 60 life science companies as well as Leiden University Medical Center, will soon house a shared pilot plant for biopharmaceutical production. Pharming Group NV, a start-up based in the science park, has partnered with Broekman Institute (Eindhoven), an animal research organization, to use rabbit milk as a source for the production of Rhucin, a Phase-III protein used to treat hereditary angioedema. "We have very low capital costs," said Rein Strijker, Pharming's chief commercial officer. "The rabbit milk has special sugar molecules. We don't have to do any scale-up. If we need more protein, we just breed more rabbits." 

ProteoNic, another start-up in Leiden, raised funds to develop a technology for optimizing the translation of messenger ribonucleic acid into proteins for biopharmaceuticals. The 11-employee company is using a network of approximately 10 corporate and R&D partners, mostly small companies, to test the technology on an industrial scale. Because of higher yields, ProteoNic hopes to reduce operating costs by 80% and capital costs by 60%. 

The prevailing Dutch preference for partnerships is going global as well. Some of ProteoNic's partners are located abroad, including an unnamed US company producing the enzyme "xylanase" from 

TI Pharma, the pharmaceutical partnership platform, has among its 42 projects an international scheme to develop technologies for making vaccines and other temperature-sensitive drugs heat stable so they can be used in developing countries. CTMM, the diagnostics platform, is allowing non-Dutch companies with no presence in the Netherlands to participate in its projects. 

In the south of the country, the development agency for the Limburg province is trying to establish a partnership organization with its counterparts in neighboring Germany and Belgium. "Between us, we could become an international center for life sciences in Europe," said Fred Bollen, the Limburg agency's senior project manager for life sciences. 

Sean Milmo is a freelance science writer based in Essex, United Kingdom.

A growing preference for public-private partnerships is spurring innovation and technology among Dutch pharmaceutical companies.