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

Sean Milmo

The European pharmaceutical industry and fine chemical producers have welcomed new moves by the European Commission (EC) to ensure that active ingredients are compliant with current good manufacturing practices (cGMPs). 

The EC has proposed in a consultative document to legislation combatting counterfeit medicines that there should be stricter auditing of active ingredients and their production plants. The commission claims that a tendency not to manufacture active ingredients in conformity with GMPs or in declared sites could facilitate a rise in counterfeiting. 

A sharp increase in seizures of counterfeit medicines in the European Union—almost fivefold in 2005 alone—and signs that fake drugs are entering the European market has sparked the commission into taking action. In fact, there has been evidence of Europe becoming a base for the assembly of counterfeit medicines, their packaging, and distribution to markets outside the region, mainly Africa and Latin America. 

A key feature of the EC's proposed legislation, which would take effect in two to three years if passed, is that it would apply to all participants in the supply chain—not only manufacturers and wholesalers, but also traders, agents, and brokers. In particular, those involved in re-exporting operations and business-to-business activities would have to comply with the new regulations. 

Audits, defined as verification of compliance with standards of an economic operator by another economic operator, would be mandatory between a manufacturer and contract manufacturer and also between a supplying wholesaler and purchasing wholesaler. The EC suggests that auditing of suppliers by purchasers could be carried out by accredited and professionally qualified third parties.  

The commission also believes that testing of supplies of active substances by efficient analytical methods such as fingerprint techniques and near-infrared spectroscopy should be mandatory. These methods could help to detect residues and impurities indicating that active substances have been manufactured with undeclared processes or at uncertified sites. 

Rather than being applied as a guideline, GMP principles in active substances would be legally binding as they currently are with GMPs for finished medicinal products. 

"It's taken a long time but at last the commission seems to have acknowledged that what we have been asking for makes a lot of sense," says Guy Villax, chief executive of the Portuguese active ingredients producer Hovione and a board member of the European Fine Chemicals Group. "About 80% of APIs used to make EU medicines come from outside the EU, most of which are now off patent. It is even more important now that CGMPs are effectively enforced, otherwise the cheats and rogue middlemen trading in substandard and often counterfeit active ingredients will not be put out of business." 

The European Federation of Pharmaceutical Industries and Associations (EFPIA), the EU's primary trade body for medicines, has urged not only the introduction of stricter auditing rules but also more inspections of active ingredient plants outside Europe by inspectors from national European licensing authorities and the European Medicines Agency. 

"That means the provision of a lot more resources,"  says Ann Robins, EFPIA's legal affairs director. "But the EU should be able to back up its commitment to tighter compliance with GMP standards by making more funds available for enforcement of regulations." 

The EC has proposed an EU-wide introduction of a system for tracking and tracing specific packs of medicines with electronic pedigree data on past ownerships and transactions. This could be achieved through a mass serialization scheme based on 2D-data matrix barcoding for which California is providing a legislative model with a regulatory system due to be implemented in early 2011. EFPIAis hoping the EUmay also have legislation ready for an e-pedigree scheme by then. 

The association is planning to launch a data matrix-based serialization pilot project this year to use as a model for a uniform Europe-wide system. Some parts of the industry worry that EU legislation on counterfeiting may come too late to prevent individual countries adopting their own different pack-specific tracing systems.  

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

Articles

With counterfeiting on the rise and Europeans worried their backyard is becoming a base for such illegal activity, legislators have proposed a series of solutions that span the continent and abroad.

Report from Europe

A wave of pharmaceutical expansions is expected in Europe this year, surprisingly by Indian companies. Their goal is to use the region as a production base for supplying the global market—particularly North America—with active pharmaceutical ingredients (APIs) and intermediates. In the past two years alone, Indian companies such as Dr. Reddy's Laboratories (Mumbai) have used acquisitions to build a strong presence in the European generics sector. Among the biggest deals have been Dr. Reddy's $690-million takeover in February 2006, of Betapharm, Germany's fourth largest generics player, and Mumbai-based Wockhardt's $265-million acquisition of Negma, France's fourth biggest integrated pharmaceutical company, in May 2007. In fact, Wockhardt has taken the lead as the largest Indian pharmaceutical company in Europe, with 1500 staff. 

Now there are signs that Indian companies desire a significant position in contract manufacturing in Europe. They plan to grow production capacity via outsourcing, partnerships, and acquisitions. 

Bangalore-based Avesta Biotherapeutics and Research Pvt. Ltd (ABRPL), a joint venture between Avesthagen (Bangalore) and Meditab Specialties of the CIPLA Group (Mumbai), acquired the biologics operation of Siegfried GmbH in Switzerland with the aim of strengthening its biopharmaceutical contract-manufacturing activities. The move fits in with ABRPL's strategy of being able to meet the manufacturing standards of both the US Food and Drug Administration and the European Union's European Medicines Agency. 

These deals demonstrate a reversal in a trend of European pharmaceutical companies manufacturing their APIs and intermediates in India. "Indian companies are now outsourcing APIs from Europe because of the advantages of having products in both the North American and European market which are made in European plants and have been approved by the EU plant inspection agencies," said Roger Laforce, marketing and sales general manager for Fabbrica Italiana Sintetici (FIS), a leading Italian advanced intermediates producer, at the 2007 ICIS Fine & Specialty Chemicals conference in Hamburg, Germany. "We're now making APIs for Indian companies." 

Manoj Dutt, managing director of Solaris Chemtech (Gurgaon, India), said on the sidelines of the conference that, as Indian companies become global operators in the production of APIs and intermediates, they will inevitably want to have production facilities in Europe. 

"As they expand internationally, Indian [companies] want to make use of the technological expertise of European fine chemical companies by, if necessary, taking them over," he added. "They also want to benefit from the close relationships which European fine chemical producers have with the large Western pharma companies. Some of the European fine chemical companies seem content to restrict their activities to Europe because of these close ties with Big Pharma." 

Indian pharmaceutical companies are targeting Central and Eastern Europe (CEE) for expansion because the area provides a platform for exporting into Western Europe as well as into the neighboring Commonwealth of Independent States (CIS), including Russia. 

A number of Indian companies are already making their move. Ranbaxy (Gurgaon) acquired Terapia S.A., Romania's largest independent pharmaceuticals company, for $324 million in 2006. Sun Pharma (Mumbai) bought ICN Hungary, a producer of controlled substance APIs in 2005. And, Strides Arcolab (Bangalore), a leading Indian specialist in the production of finished generic medicines, has established a regional production base for making dosage-form pharmaceuticals in Warsaw, Poland, which will also be part of the company's global manufacturing network. 

"Production costs in CEE countries are cheaper than in Western Europe where there is a general trend to move production facilities from western to eastern countries, especially to Hungary and Poland where there is a strong base of qualified employees," says Aleksandra Jargot, an analyst at Frost & Sullivan, a market research organization headquartered in London.set up facilities.  

"CIS markets have huge potential and the eyes of multinational pharmaceutical companies are already being directed toward them," she adds. "Currently, India is the third largest exporter of drugs and pharmaceuticals to Russia. 

"The CEE is also a fast-growing generics market itself with consumption of pharmaceuticals still being much lower than in Western Europe," she explains. "Thus Indian companies, like other foreign companies, are interested in supplying that market as well." 

Indian companies could establish a large manufacturing presence in Europe, perhaps ultimately similar in size to that set up by US pharmaceutical producers in Europe in the 1960s and 1970s. Unlike their US counterparts a few decades ago, however, multinational Indian companies will not have to restrict themselves to Western Europe but will be able to spread across the entire continent. 

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

A wave of pharmaceutical expansions is expected in Europe this year, surprisingly by Indian companies.