Early-stage and mid-size bio/pharmaceutical companies have enjoyed an embarrassment of riches over the past 18 months. The window for initial public offerings (IPOs) re-opened, at least for a while. Global bio/pharmaceutical companies continued their frenzied pace of partnering and acquisition activity, and venture capital spiked up as the prospects improved for rich exits. 

Because the contract services industry floats on the tide of external funding to a large degree, one would expect the bio/pharmaceutical contract services industry to be doing well in this robust funding environment. The results of the 2014 edition of the PharmSource/

 Outsourcing Survey, conducted in June 2014, confirm that expectation. Bio/pharmaceutical company respondents reported strong growth in spending on contract services this year (F

). Among that group, 19% said their company’s spending on contract services in 2014 is at least 20% higher than in 2013; the comparable figure in the 2013 survey was only 12%. Another 17% of 2014 respondents said their company’s spending is up at least 10%, about the same as last year. Only 9% indicated that spending had declined year-over-year.

As in past years, bio/pharma respondents reported that contract services expenditures are growing at the same rate as total spending, but that trend is more pronounced than in past years (

): 52% of bio/pharma respondents indicated that outsourced spending is growing at the same rate as total spending versus 42% last year and 39% the year before. Only 20% indicated that expenditures on contract services are growing faster than total spending, down from 29% in 2013.  


As expected, responses from contract service providers confirmed that they are enjoying a strong  2014. Of the total responses from that group, 32% characterized 2014 as “Very Good”, up from 20% in 2013. Further, only 5% of contractor respondents characterized this year as “Not Very Good” compared to 15% in 2013.

Most contract service providers were expecting 2014 to be a good year but those expectations may have been somewhat muted after disappointments in 2013. In the 2013 survey, 25% of CMO/CDMO respondents indicated that the year’s activity was “Worse than Expected” but only 12% have been similarly disappointed this year. Fifty percent said this year’s performance has been “As Expected” while 38% indicated it was better than expected. 

As in past years, contract service providers singled out mid-size and specialty bio/pharma companies as the main drivers of business success for this year (

), but there has been a big surge in the performance of small bio/pharma companies: 23% of contractor respondents identified small bio/pharma companies as their best-performing customer segment versus just 5% in 2013. This surge is consistent with what would be expected from the robust funding environment: smaller companies have been beneficiaries of improved venture capital and partnering funding, while mid-size and specialty companies benefit from improved public equity markets and partnering. The significance of generic-drug companies declined: only 18% of CDMO respondents identified them as their best performers, versus 28% last year. 


With demand for their services strong, service providers have not been as aggressive in soliciting new business as they have in past years. Among bio/pharma respondents, twice as many indicated that service providers “Are not asking for new business”: 27% in 2014 versus 13% in 2013. Further, bio/pharma respondents indicated that service providers are less willing to negotiate prices than in past years: 34% indicated that service providers “want new business but will not cut price to get it” up from 30% in 2013.

For service providers, the risk of losing clients as bio/pharma companies consolidate their supplier base remains high: 43% of bio/pharma respondents said they have reduced or plan to reduce the number of vendors they work with, the same as 2013. Interest in working with CMOs and CDMOs in India and China, in particular, continues to decline. Fifty percent of bio/pharma company respondents indicated they have no plans to source from those countries, up from 41% in 2013 and 33% in 2012 (

Interestingly, while bio/pharma companies say they are less interested in sourcing from India and China, service providers still see that as the biggest risk to their business (

). Their concern about continued funding for development activities, however, has drawn almost even with the India/China concern: 20% identified cuts in spending at global bio/pharma companies as the biggest risk to their business, double the number in 2013, while 23% focused on the risk of reduced funding for early-stage companies. Clearly, the service provider respondents understand that the external financing environment and global bio/pharma’s need for new products are driving their success. 

We continue to poll the industry on perceptions of service provider performance. In 2014, as in past years, there is a significant gap between how customers see CMO/CDMO performance and how they see themselves (

). The big gaps continue to be in the “soft” areas of project management and customer service, but there is greater satisfaction with levels of technical and operational performance. 

Customer expectations indicate that 2015 should be another good year for the contract services industry (

). One-third of bio/pharma company respondents expect their spending to increase by 10% in 2015, the same percentage as in the 2013 survey. Only 11% expect spending to decrease while most anticipate spending to be the same or slightly higher in 2015.


  Overall, the 2014 edition of the PharmSourcePharmaceutical Technology Outsourcing Survey paints a positive picture of the contract services industry: spending is up, pricing has firmed, and the risks of low-cost overseas competition have diminished.

A closer look at the data, however, suggests some red flags that CMOs and CDMOs should heed carefully. In particular, the survey respondents suggest that the contract services industry’s success is largely a result of the improved financial environment, rather than an increased acceptance of outsourcing. This belief is borne out by the fact that for the majority of bio/pharma company respondents, their contract services spending is growing at the same rate as their total spending; and by the big surge in the importance of small bio/pharma companies as drivers of growth for service providers. 

The reliance on smaller companies is concerning for three reasons. For one, funding for early-stage companies tends to be highly cyclical, with periods of robust financing followed by periods of relative drought, so it cannot be a driver of consistent performance. Further, because the preferred early-stage bio/pharma business model is to be totally or highly virtual (i.e., nearly all of their development activity is outsourced), there is little or no room for growth by getting them to outsource more than they already do. Finally, because investors in an early-stage company are generally looking to sell the company or out-license its candidates to larger companies, most early-stage companies do not offer long-term revenue streams.

In the clinical research sector, the largest and best-performing CROs are those that have formed strategic sourcing relationships with global bio/pharma companies, which have the biggest pipelines and deepest pockets. Those relationships have been harder to create for CDMOs and CMOs because global bio/pharma companies continue to show a preference for in-house manufacturing and development, especially for high-margin products like biologics. A recent PharmSource study found that between 2010 and 2013 bio/pharma companies spent $114 billion on new facilities and equipment, despite the global financial crisis and demand for cash to fund acquisition and licensing deals (1). 

CMOs and CDMOs should enjoy this unusual, central-bank driven tidal wave of industry funding, but must remain aware that they can’t expect it to go on forever. In particular, they need to make sure they continue to cultivate client relationships and battle for new business, and not just answer telephone and e-mail inquiries.


  1. 	PharmSource, “Make vs. Buy: Bio/Pharma Capital Expenditure Trends and Implications for Contract Services” (July 2014).


  Jim Miller is president of PharmSource Information Services, Inc., and publisher of Bio/Pharmaceutical Outsourcing Report, tel. 703.383.4903, info@pharmsource.com, 
www.pharmsource.com.

Articles

Outsourcing

The contract services industry?s success is largely a result of the improved financial environment, rather than an increased acceptance of outsourcing.

Contract Services Ride High As Funding Floods Biopharma

For a bio/pharma industry in flux, contract services are playing a greater—and more diverse—role in drug development. Representatives of contract research (CRO), contract development and manufacturing (CDMO), and contract manufacturing organizations (CMOs) discuss business, technical, and regulatory changes influencing outsourcing practices for drug development.

An influx of investment in the biotech sector, drug company mergers and consolidation, development partnerships, globalization, and new drug development strategies are shaping the way drugs are brought to market. The role that contract service organizations play in the process is evolving.

 Outsourcing Survey indicate a generally positive outlook for outsourcing firms, as drug sponsors reported steady or increased spending for contracted services (1). To provide a closer look at key issues, representatives of contract research (CRO), contract development and manufacturing (CDMO), and contract manufacturing organizations (CMOs) shared their perspectives on business, technical, and regulatory changes influencing practices in drug development with 


When bio/pharma companies consolidate due to mergers and acquisitions, the supplier base often changes. In the PharmSource-

 survey, however, less than 7% of the respondents from contract service organizations identified acquisition of products and companies by Big Pharma as the single greatest risk to their business in the next two to three years. Rather, many who responded to the editors’ questions saw opportunity.

 “A lot of consolidation is happening in the industry in the form of mergers and acquisitions. This will have beneficial effects on drug-development processes that are limited by funding and resources as mergers often provide an opportunity to increase spending for selected programs,” said Praveen Raheja, associate director, formulations, Dr. Reddy’s CPS. 

“Large Biotech and Big Pharma have made a shift in strategy to outsource. This is a significant change to the mind-set from just a few years ago,” said Andrew Strong, president and CEO, VP business development, Kalon Biotherapeutics. “As a result, the work process and communication flow between biopharma and CMOs has improved. It’s more collaborative and more conducive to long-term relationships and successful outcomes. The not-invented-here mentality has softened, the interaction [is] more collaborative than protective and allows for a more successful outcome.”

“The reductions of in-house capabilities of certain major pharmaceutical companies have resulted in an increase in business with outsourcing vendors,” said Richard J. Holl, director, pharmaceutical science, Catalent Pharma Solutions. “Accompanying this reduction, numerous venture-funded and small start-ups have been established that frequently do not have the infrastructure to support the development of their drug products, and rely more on outsourced vendors to provide these capabilities.”

Mayur Valanju, head of sales and marketing, Baxter BioPharma Solutions, expressed similar sentiments. “Several years ago, the majority of development work was being done by large pharmaceutical companies. Today, we are seeing more biotech firms and virtual companies doing the initial phases of drug development and, in some cases, full commercialization. Because biotech firms generally have less in-house expertise in manufacturing than large pharmaceutical companies, they rely more on the CMO to provide a broader range of services and expertise,” he said.

“There has been a trend, particularly in the small/mid-size drug sponsors or those new to the biopharmaceutical market, towards a more consultation-type relationship with the service provider,” said Mark Rogers, senior vice-president, SGS Life Science Services. “Rather than simply asking for a pre-determined list of tests, service providers are now becoming much more involved in experimental design and assistance with regulatory issues.”

“The number of virtual pharma companies is growing,” said John S. Ross, executive vice-president, Metrics Contract Services. “Thanks to their business models, these companies are committed to working with outsourcing partners, especially when it involves potent and cytotoxic products. In addition to observing more virtual operations among drug sponsors, we see them involving more consultants who are charged with providing regulatory and CMC guidance. Drug sponsors also are relying more upon domestic CDMOs for quality outsourcing.”


  Other shifts have been observed in big pharma business practices. “With major pharmaceutical companies, we are observing an increase in strategic partnering and outsourcing of development activities that were previously kept more in-house,” said Todd Stutzman, director, pharmaceutics, Catalent Pharma Solutions. “In addition, we have seen the establishment of operating units within major pharmaceutical companies that have more of an entrepreneurial approach to drug development than we have seen in the past.”

Specialty services offered by contract service providers are being used to fill gaps in knowledge, expertise, and resources. “Drug sponsors are now more inclined to outsource activities to CMOs with niche capabilities and CMOs that add value to the development process, either in terms of integrated operations, shorter time to market, or providing support throughout the lifecycle management of the product,” said Raheja. 

As in any purchasing arrangement, buyers are becoming more selective when weighing outsourcing options. “Drug sponsors have become more informed consumers of outsourcing services. We see a more savvy client, with better internal infrastructure to support outsourcing,” said Strong. “Even the smaller, more virtual companies understand what expertise they need from analytical, regulatory, and process development. The use of consultants to support their interactions with CMOs has increased the virtual company’s understanding of what it takes to get to the clinic.”

“There also is increased engagement and influence from procurement groups within client organizations, which makes pricing and costs a more critical factor in the selection of service providers,” said Magdalena Mejillano, vice-president, cGMP labs, PPD. Drug sponsors also are seeking ready access to data and technical documents through a centralized repository or portal that is interactive, flexible, and easy to navigate, she said. “Clients often request key performance indicators including quality metrics, project turnaround times versus targets, actual versus budgeted spend, project team utilization, etc.”


Growing interest in research and development of biologics-based drugs also is shaping the demands on contract service organizations. In the 

11th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production

, BioPlan Associates estimates that the $190 billion worldwide market for biopharmaceuticals is growing at a healthy 15% annually (2). 

“The drug pipeline has continued to shift from small molecules and higher volume indications to biologics with lower volume indications. As the pipeline has shifted, so have the opportunities that are provided to CMOs,” said Valanju. “As such, it is increasingly important that CMOs have the technical expertise to manage biologics within their facility. Additionally, as volumes from individual molecules have dropped, CMOs have had to adapt and implement processes to manage more molecules at one time.”

A surge in investment in small biotech companies, especially in initial public offerings in the United States, has spurred activity. “The flow of investment, primarily from a very strong series of IPOs in the US market during 2013, has been welcome and has helped a number of our customers to progress lead drugs through the clinic,” explained John Sandles, business analyst, Fujifilm Diosynth Biotechnologies.

Outsourcing of biologics manufacturing has seen an increase over the past couple of years, said Mark Pearson, director business development, Dr. Reddy’s CPS. “This increase may be due to increased funding following the recession, and that drug companies have become more risk averse. Outsourcing mitigates risk of capital investment in manufacturing plants for the drug companies,” he said.

The increase in biologics drug development has spurred contract services activity for reasons other than cost cutting. Eric Langer, president of BioPlan Associates reports that new data from the his company’s annual study (2) indicates that cost control is becoming less of a driver of outsourcing activity. Instead, outsourcing is becoming more connected with higher-end, technical activities for which the right partner is more important than an extra dollar saved, he reports (3).

For example, analytical laboratories see increased demand for testing for biosimilars. Mejillano reports seeing “a definitive shift in outsourcing analytical services for biologics and biosimilars compared to small molecules. In addition, extractables/leachables for both small- and large-molecule products as well as generic product testing are on a growth trajectory in terms of outsourced work.”

Ron Connolly, senior vice-president, commercial operations, Frontage Labs, offered similar observations. “Many sponsors in the market segment of biosimilars are outsourcing most of the analytical work due to the need for trained chemists and equipment in order to perform testing to characterize molecules. As a specialized, high growth area, many sponsors do not have the capacity in house and look for organizations to guide them through the process,” he said.

However, the biologics market faces challenges. “The current biologics market is successful based on the criteria of revenue growth, and improvements made by biologics to people’s quality of life. This is balanced by project failures and reimbursement challenges,” said Aileen Ruff, strategic director, advanced delivery technologies, Catalent Pharma Solutions. “To be more successful, the basics need to be addressed. The industry needs to get better at discovery and at determining which products will succeed and applying technologies, clever development strategies, and quality by design to get product to market.”


With growth rates of biopharmaceutical consumption and production in emerging markets outpacing established economies, contract service providers see both opportunity and risk in these areas. 

“The emergence of BRIC [Brazil, Russia, India, and China] countries is highly significant and it has become increasingly important to serve these regions with development, delivery, and supply solutions, which is why it’s imperative to continually invest in new facilities and capabilities,” said Min Park, group product manager, advanced delivery technologies, Catalent Pharma Solutions.

A global supply chain for raw materials may provide some cost-effective options for drug manufacturers, but not without quality risks. The emergence of low-cost API and products primarily from India and China puts additional pressure on costs, reports Franco Negron, vice-president, N. America operations and integration, Patheon Inc.

“Drug sponsors are experiencing higher uncertainty with the ability of offshore markets to comply with GMP regulations, an uncertainty that’s been fueled in recent years due to high-profile lapses in drug product integrity,” said Ross. “As a result, they are relying more upon domestic CDMOs that offer proven high-quality standards and more transparent operations.”

“The supply chain within the pharmaceutical industry has become more complex due to high market dynamics and globalization. A growing number of customers and products and a fluctuating market demand make it more challenging for contract manufacturers to plan ahead,” said Peter Soelkner, general manager, Vetter Pharma International GmbH. 

Regulatory oversight offers positives and challenges


Foreign regulatory agencies have also increased their inspection of drug manufacturing facilities, said Stutzman. “These organizations sometime have unique interpretations of cGMP requirements and differing opinions as to how to achieve compliance,” he commented.

“Harmonization has had a positive impact on the analytical services,” said Paul Skultety, vice-president, pharmaceutical development services, Xcelience. “This makes it easier to meet the regulations as you have one set of criteria to test against.” 

Others see progress and room for improvement. “Regulatory bodies, in general, have increasingly strengthened their requirements,” said Soelkner. “While it’s challenging to keep abreast of changing regulatory standards, the relentless push to increase quality is vital to patient safety. More explicit requirements, like the cGMP rule for combination products from the FDA, gives us as a contract manufacturer a better insight into what authorities expect on a granular level. Ideally, we would like to see a move toward global harmonization of regulatory standards.”

“CDMOs continue to be challenged by the various standards for GMP processes at different developmental stages as established by different country’s regulatory authorities,” said Ross. “It would be helpful to have more global consistency.” 


Recent regulatory action has created additional opportunities that contract service organizations are addressing. A risk-based approach to drug development allows industry to institute product elements during the development phase based upon product knowledge of interactions with container/closure systems and the manufacturing process, said Kelly Davis, director, regulatory affairs, Baxter BioPharma Solutions. “The utilization of this approach requires industry to better understand the impact of container/closure and manufacturing process changes. Industry is now provided the ability to manage their products based upon scientific data vs. legalistic interpretation of regulatory guidances.”  

“The implementation of quality by design (QbD) and its acceptance in the industry is creating the need for an updated approach in the drug-development process,” said Connolly. “The increased work to understand the finished dosage form can be substantial depending on the product and manufacturing process. There has been a notable increase in the amount of sample analysis required to understand the process design space and critical quality attributes.”

“The most significant change is the focus on supply-chain security,” said Negron. “Better control of suppliers, more reliable processes, and greater flexibility to meet shifting demands is increasingly important. Also, CMOs and sponsor organizations are now jointly responsible for the integrity, safety and efficacy of their products,” he said.


  1.	J. Miller, “Positive Outlook for Outsourcing,” 

, 38 (8 supp.) 6-12.
  2.	BioPlan Associates, 

 (Rockville, Md, 2014).
  3.	E. Langer, “Outsourcing No Longer Just for Cost-Cutting,”  

Contract service providers are playing a more diverse role in drug development.

Contract Providers Assume Expanded Responsibilities

The drivers for the development of new raw materials are, as always, changing customer needs. At the top of the list in today’s industry, according to Douglas Bowman, program manager for PharmaGrade raw materials at SAFC, is risk reduction. Beyond that, he says that customers are looking for effective ways to increase performance and output and optimize productivity. 


“The demand for supply chain security and transparency continues to grow and is the number one concern of many drug manufacturers as they navigate the new market,” asserts Bowman. In fact, many manufacturers are still working to respond to guidelines implemented in 2012 that require final end-users to have visibility of their raw-material supply chain. “Biopharmaceutical manufacturers are faced, now more than ever, with the reality of global events that have threatened and breached supply chain security,” adds Beth Ann McLane, SAFC’s product manager for enhanced quality. Global threats to the security of the raw-materials supply chain have caused a public outcry, and regulatory bodies have demanded higher levels of compliance. “Manufacturers are now being held fully responsible for the raw materials that go into their products and they simply do not have enough capacity to test for all of the possible contaminants that could find their way into the materials,” she comments. 

In response, the industry is moving towards risk assessment and risk mitigation of raw materials from the early stages of drug development. Manufacturers are looking to their raw-material suppliers to provide them with the support of a secure supply chain, according to McLane. “The more that biopharmaceutical manufacturers know about their suppliers and the raw-material supply chain, the more confident they can then be about the safety of those raw materials,” she says. Achieving this goal requires tracing these materials back to the manufacturer and demonstrating that there is a stringent change-control process in place. 


At the same time, the push to reduce risk has caused many manufacturers to move away from animal-derived materials that provide high performance in cell-culture manufacturing, such as serum, which is creating additional challenges in maintaining productivity and yields. The need to optimize productivity has, therefore, led to increased scrutiny of other raw materials in the media, as well as other bioreactor supplements. “There is a much greater focus today placed on isolating extraneous matter or impurities that could have a negative effect on the performance of raw materials,” Bowman observes. “Where, as a result, having a controlled source in combination with meaningful specification is optimal.”


In the past, according to Bowman, manufacturers typically asked only for the name of the source of a raw material from their supplier and considered this information to be ample identification of the “source”.  Much has changed since then, because customers realize the amount of risk such an approach involves, particularly given the requirements of increasingly stringent global regulations. “Manufacturers are now looking to source higher quality--GMP or similar quality level, such as SAFC’s Elite--across the board. It is no longer just a handful of raw materials receiving attention; any material being used in drug manufacturing is receiving a greater deal of attention,” he notes.  


The drive toward plant-based materials brings greater inherent variability to the table. “When something comes from the earth, there are many factors that cannot be controlled--factors that can change a material from lot to lot,” says Bowman. SAFC, as a raw-material supplier to the biopharmaceutical industry, has met this challenge by increasing its levels of testing and working to chemically define materials if possible. For those substances that cannot be chemically defined, and particularly in the case of plant-based raw materials, the company works to secure its sources and control what it can. “The rest of the process,” comments Bowman, “involves continuous learning built on research and testing of the materials that allows us to capture and analyze critical data points.” 

He does stress, though, that meeting these challenges is not as simple as it may seem. SAFC, despite the difficulty, has chosen to view the situation as an opportunity. “We have worked on expanding our PharmaGrade line of high-quality, controlled, and documented materials to remove some of the pressure on manufacturers, but the process is grueling. We must identify how/where the product is made, conduct audits, establish quality agreements, ensure there is a stable change-control process, and obtain full documentation for customers, and of course, conduct extensive testing.” Through this comprehensive process, the company believes it can gain an understanding of the types and levels of contaminants associated with raw materials and use that information to mitigate their biological impact at different levels. 


SAFC’s PharmaGrade portfolio was created in response to urgent demand from customers for products they can count on to be consistent and that are from a source where the production is controlled and changes are limited, according to McLane. “These types of customers are not only looking for a guaranteed level of quality; they also want to know what is happening with the raw materials and be notified if/when any changes occur,” she observes. To provide a higher level of documentation and support, SAFC has invested significant resources into the identification and qualification of products for the line and established a strong change-control notification system.

Each product has a complete dossier of information about it, including the site of manufacture and the quality systems associated with the product. New materials must also meet seven key criteria that were developed based on customer requests and include manufacture under GMP (or SAFC’s Elite) quality guidelines, supply-chain transparency, formal vendor qualification, quality assurance review and release of each lot, change-control notifications, quality documentation, and availability as catalog items. The PharmaGrade range includes amino acids, buffers, and specialty chemicals that are widely used in biopharmaceutical manufacturing.


SAFC has also been focused on a stringent raw-materials characterization program to improve product/media formulations that involves the identification of impurities that impact productivity and product quality. “The goal here is to test and gather enough data that we can automatically identify performance issues and correlate them to a specific raw material. We also believe that if we can fully understand the biological effects of contaminants, we can then work to identify specifications that will enable more efficient biopharmaceutical production for our customers,” Bowman explains. 

On the customer side, the company is also taking time to educate customers so that they receive the grade of material that they actually need. “Our PharmaGrade raw materials are often not required for early development projects, while research-grade materials are not appropriate for commercial applications and could have grave effects on the final drug product,” he says. “We are, therefore, focused on aligning with our customers to really learn their processes and help them identify the right materials that are fit for purpose and ultimately fit for manufacturing,” he continues.


Supply-chain security is an issue that the entire pharmaceutical industry is grappling with. Both biologics and small-molecule pharmaceutical manufacturers, contract manufacturers, and raw-material suppliers are facing the same challenge of ensuring the quality and safety of the products they purchase and/or sell meet the standards set for drug product manufacturing and formulation.

 “The industry is coming together over this issue because these challenges are not just for one manufacturer; they are challenges for all manufacturers. Finding appropriate resolutions creates great opportunity for everyone,” Bowman asserts. Groups such as Rx-360 and the Parenteral Drug Association are working to define and standardize methods for achieving supply-chain security and raw-material quality, as well as educate their members. “Such industry-wide challenges require industry-wide answers to ensure that drug manufacturers are meeting and exceeding quality standards,” Bowman says. In particular, he points to the efforts of Rx-360 to encourage the use of more effective, shared audits that would allow the industry to take a significant portion of the time spent auditing to focus on these greater challenges. On a more global scale, Bowman believes that the International Conference on Harmonization (ICH) Q3 guidelines for elemental impurities, which are under development and will update the analytical requirements for heavy metals and other contaminants, will likely result in significant changes in detection methods and limits that can help the industry streamline raw-material standards. 


In the end, raw-material development for the biopharmaceutical industry is no different than new product development in any industry with respect to the importance of determining what customers really need and then working to meet those needs with a clear, educated, scientific approach, according to Bowman. “To that end, at SAFC we have honed in on identifying product characteristics that impact the performance and consistency of the formulated products we develop. We also want to make it simple for customers by offering the most commonly used products at an exceptionally high-quality level right off the shelf in order to eliminate the need for customization,” he says.


Cynthia A. Challener is a contributing editor at Pharmaceutical Technology.

API Synthesis & Manufacturing

Biopharma are looking to reduce risk, increase performance, and optimize productivity in raw material development.

Supply Chain Security Tops Concerns for Biopharma Raw Materials

The African pharmaceutical market is growing at approximately a 10% compound annual growth rate and is expected to reach $42 billion by 2020, according to IMS Health. Such numbers are attracting pharmaceutical companies looking to expand their global footprint. To be successful in this very fragmented and emerging market, however, manufacturers of biologics must be aware of the many challenges that drug companies face when entering this region, as well as the issues specifically associated with these very sophisticated therapeutics. Most importantly, those firms that want to benefit from the anticipated growth in Africa must be willing to overcome the challenges and start investing in having a presence today, or risk being outcompeted by local and international firms in the future, says Dan Rosen, consultant with IMS Health’s Thought Leadership Group.


  “Africa is becoming a major emerging economy as growth in other countries in Asia, such as India and China, begins to slow. Even in just the last 10 years there has been a major shift in the economic and political conditions in many African countries,” notes Rosen. Unfortunately, he adds that many myths about the continent persist, and often the advances that have been achieved are not understood or recognized in the West. He points to the Ebola outbreak as a good example; while many assume it is a problem across the continent, the virus is only currently present in three countries, none of which are major growth markets in economic terms.

Making such general assumptions and ignoring the fact that Africa is comprised of more than 50 distinct countries is a big mistake for biopharmaceutical manufacturers looking to enter Africa. There are big differences between the countries in the northern, middle, and southern parts of Africa, differences from country to country, and even differences within countries on a tribal basis. The region can also be viewed from the perspectives of language, religion and cultural ties, English and French colonial histories, and trade blocks. Companies must also consider the public (government and non-government organization [NGO]-funded markets) and private markets within countries. 

In addition, because biologics tend to be very expensive, biopharma manufacturers must carefully consider their target markets, according to Sarah Rickman, director of the IMS Thought Leadership Group. “Except for vaccines and insulins, most biologics will only be purchased privately by wealthier individuals that have insurance,” she adds. Countries with such populations include Algeria, South Africa, and some sections of Egypt, and the larger sub-Saharan African countries. Within these countries, the facilities where the people who can afford biologics drugs can get treatment are typically concentrated in cities with larger populations.

Vaccines for the prevention of infectious diseases and insulin products, which are currently in demand due to a growing epidemic of Type II diabetes, particularly in Kenya and South Africa, are often purchased by governments and NGOs at reduced prices. Biologics manufacturers should not ignore the potential opportunities in selling to governments, though. “While the margins are often much lower, the volumes are much larger than is possible in the private sector and there is real potential to establish brand recognition,” Rickman explains.

She also suggests that biopharmaceutical manufacturers be prepared for the fact they won’t be doing “business as usual” in Africa and pick their battles very carefully. For Rosen, that means looking at the 5-10 largest markets and focusing on the largest cities within them.


  Both small- and large-molecule drug manufacturers face challenges in getting their products to the market and to patients. “The healthcare infrastructure is not established like it is in mature markets, and there are many issues that must be addressed regardless of the type of drug, such as the lack of patient awareness and limited access to healthcare,” Rickman observes. She adds that often patients prefer to receive treatment from local healers, even for serious illnesses, and thus early diagnosis does not often occur. Furthermore, many people prefer to receive local medicines rather than take drugs manufactured by western companies. 

The lack of an adequate distribution system is another factor that pharmaceutical companies must be willing to address, either by investing in the supply chain directly or finding partners to assist them. “Often people in Africa pay higher prices for original branded drugs than anywhere else in the world due to the numerous markups that occur as the products travel from the manufacturer to the patient. Therefore both availability and price are critical issues. Drug manufacturers must ensure that their products are not only getting to patients, but are at relatively affordable prices,” Rosen asserts.

There are added complexities for biopharmaceuticals. For example, supply chain concerns are exacerbated for biologics because of cold chain issues. “Often there are no facilities with reliable temperature controls, which complicates the shipment of many biotherapeutics,” comments Rickman. She adds that needle reuse/collection is another concern with biologics. 

There is also a lack of doctors that are trained to diagnose diseases that require treatment with biologics drugs, such as autoimmune and oncology-related diseases. “Highly trained specialists are required to prescribe biologics drugs, as are facilities with the capabilities to administer them, and there are very few of both in Africa currently,” says Rosen. He notes, however, that the latter issue is beginning to be addressed, with venture capital groups investing in the construction of private hospitals in large population centers. Nonprofits are doing so as well, such as Aga Khan Health Services, which has constructed health care facilities in Kenya, Tanzania, and Uganda, as well as many other developing nations. 


  The most successful western pharmaceutical companies operating in Africa today¾Sanofi and GlaxoSmithKline are two key examples¾have made sure that they have local people involved in the decision-making process, according to Rickman. “Whether setting up an affiliate with local offices or partnering with a domestic pharmaceutical manufacturer, biologics companies looking to participate in the African market must set up their businesses so that local people with knowledge of the market can make decisions without having to get everything approved by someone back at headquarters,” she adds. Of course, as the business becomes more decentralized, more local talent is needed, which can pose a separate challenge.


  The high cost of biologic drugs has created an opportunity for companies from low-cost regions of the world, particularly China and India, to provide non-original biologic drugs (not biosimilars, but copies) to the African market. While the quality of these drugs is typically below that of the originator products, they have made inroads in some areas and are expected to build market share over time.


  Despite the many challenges outlined above, IMS Health believes that the potential for real growth of the African pharmaceutical market is strong, and the environment is definitely positive. “The market is dynamic and changing very rapidly. Within just five years, we expect that the population in Africa that will be able to access and afford advanced drugs will be much larger. Companies that do not establish a presence now will find it very difficult to compete against manufacturers with established brands and low-cost suppliers in the future,” Rosen concludes.

Business

Biopharma companies seeking to leverage opportunities in African market must adopt the right strategy to achieve success.

African Biopharma Market Presents Long-term Opportunities

Two years into the Generic Drug User Fee Act (GDUFA) program, enacted in July 2012, FDA officials are striving to meet goals and timelines for speeding new generic drugs to market. Agency reviewers have made some progress in eliminating the huge backlog in abbreviated new drug applications (ANDAs) pending in the Office of Generic Drugs (OGD), but not as quickly as manufacturers had anticipated. New guidance from FDA aims to help manufacturers meet standards and to streamline oversight. But a continual rise in submissions to the agency makes it hard for reviewers to get ahead, especially in the wake of a surge of 600 ANDAs filed in June to beat new stability testing requirements.

An efficient and comprehensive generic-drug review program is important for FDA to facilitate consumer access to high quality, low-cost generic drugs. Unfortunately, manufacturing problems with generics continue to precipitate recalls and shortages. FDA has blocked the import and sales of numerous generic products from leading manufacturers such as Wockhardt and Dr. Reddy’s Laboratories. And dissolution problems with beta blocker metoprolol have raised new concerns about the safety and efficacy of extended-release generic drugs. 

Quality lapses make it difficult for the generic-drug industry to challenge policies linked to enhanced drug safety and prescribing. An FDA proposal to require label updates when new safety issues arise has generic-drug makers up in arms. Brand manufacturers support the FDA policy as a way to reduce their liability for quality and safety issues involving generics. But generic-drug firms fear that differing labels on brands and generics will confuse and alarm patients and prescribers. A recent survey sponsored by the Generic Pharmaceutical Association (GPhA) indicates that physicians and pharmacists would be less willing to prescribe and dispense generics if the rule is adopted, and many members of Congress have voiced concerns over the FDA proposal (1).

Similar issues regarding the “sameness” of generic and brand-name drugs have ignited battles over the labeling and distribution of future biosimilars. Brands are fighting generic-drug manufacturers over whether follow-on biologics can use the same name of the reference product, while also seeking curbs on automatic dispensing of biosimilars by pharmacists. 


FDA officials have long maintained that generic drugs that meet its rigorous standards for bioequivalence, stability, dissolution, and quality are just as safe and effective as the original brand. But ongoing problems with generic-drug quality have spurred new efforts by the Center for Drug Evaluation and Research (CDER) to ensure drug quality throughout the product life cycle. CDER director Janet Woodcock’s strategy is to establish a new Office of Pharmaceutical Quality (OPQ) to implement a “one quality voice” approach. OPQ will feature review teams that assess the chemistry and controls aspects of a drug product from new drug application (NDA) through generic and over-the-counter versions. While seeking higher-level approval of the OPQ reorganization, CDER is piloting this approach, explained Woodcock at GPhA’s CMC workshop in June, noting that one team reviewing the reference drug and all later versions will avoid duplication. 

OGD also looks to a risk-based approach to its chemistry review program to focus efforts on products that raise more crucial issues. OGD is implementing risk-based quality assessment for solid oral-dosage forms, based on a “failure mode, effects and criticality analysis” algorithm that assigns a risk score to each product. This approach is being tested now, explained Susan Rosencrance, OGD acting deputy director for chemistry, with the intent of expanding it to immediate release solid orals and other dosage forms. 

OGD efforts to accelerate its review process have been hampered, though, by the steady rise in ANDAs and supplements. During GDUFA negotiations two years ago, industry and FDA estimated that approximately 700 new ANDAs would be filed each year, she noted. In fact, the volume exceeded 1000 last year and continues to climb, making it impossible for the agency to eliminate the backlog as fast as expected and creating concerns about how FDA will meet faster review goals that start to phase in next year. 

The solution, from FDA’s perspective, is for manufacturers to submit more complete and high quality applications in the first place. This step would reduce review cycles and the need for multiple amendments that extend the review time frame. OGD acting director Kathleen Uhl emphasized the importance of high quality submissions at the GPhA workshop. Just filing more data does not necessarily make for a quality application, Uhl noted. OGD wants submissions to clearly demonstrate an understanding of the product and process and to avoid “superfluous data” that tries to cover up problems. 

To this end, FDA issued draft guidance on ANDA content and format in June, identifying basic requirements for a complete, high-quality application (2). The guidance specifies the information to be provided in each section of an application, following the format of the Common Technical Document (CTD) developed under the International Conference on Harmonization (ICH). It also summarizes the statutory and regulatory requirements for ANDAs and provides references to other guidance documents. 

The content and format guidance builds on an advisory issued last year on what ANDAs should include to avoid rejection under the agency’s Refuse to Receive (RTR) policy. FDA’s draft RTR guidance indicates what can trigger an RTR, including faulty listing of active and inactive ingredients, poor packaging information, lack of dissolution studies, and inadequate stability data (3). Last year, FDA issued multiple RTR letters to companies that failed to pay GDUFA facility user fees on time, but recently revised its policy to limit RTRs to applications clearly in arrears on fees or with serious shortcomings.

FDA also is updating and clarifying stability testing and assessment requirements for generic drugs as key to minimizing queries, reducing stability failures, and enhancing generic-drug quality overall. A final stability guidance for ANDAs was published in June 2013 (4), and FDA sought to clarify policy specifics in a Question & Answer guidance issued in May (5). Rosencrance acknowledged that the new policy represents “a huge change for industry,” and manufacturers raised multiple questions at the GPhA workshop about how FDA will implement the many specific requirements. But FDA is hopeful that the revision will be beneficial over the long run. 

Despite these and other challenges, Uhl reported at the workshop that OGD has made progress in meeting key GDUFA goals. Some initial action has been taken on almost 50% of backlog applications, and she sees progress towards achieving parity in domestic and foreign plant inspections. OGD aims to finalize the RTR policy this year and to issue additional guidance on ANDA amendments and on manufacturing supplements. FDA is hiring more chemistry reviewers, as supported by GDUFA, and hopes to bring on board 140 new reviewers by fall. These efforts aim to help assure the high quality of generic medicines, which, said Uhl, is “imperative in assuring the American public that theproducts you make are of high quality.”  

 (2014), www.gphaonline.org/media/cms/GPhA_Report_v2_4_FINAL_2_.pdf, accessed July 10, 2014.
  2.	FDA, 

Draft Guidance, Content and Format of Abbreviated New Drug Applications

Draft Guidance, ANDA Refuse-to-Receive Standards

Final Guidance, Stability Testing of Drug Substances and Products

Final guidance: Stability Testing of Drug Substances and Products, Questions and Answers

’s Washington editor, tel. 301.656.4634, jwechsler@advanstar.com. Read Jill’s blogs at PharmTech.com/wechsler.

A surge in generic drug applications is testing FDA?s ability to reduce the backlog of ANDAs.

FDA Strategies Designed to Speed Generic Drug Approvals

Contract manufacturing organizations (CMOs) should have the technical expertise to be considered by clients for partnerships. As results from BioPlan Associates’ 11th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production (1) show, however, it’s no longer enough for CMOs to lay claim to technology, regulatory compliance, and IP protection expertise, as these increasingly become non-negotiable issues. 

Sponsors today are demanding high levels of professionalism, performance, and effectiveness in managerial areas to accompany CMOs’ technical expertise. Indeed, when BioPlan surveyed 238 industry decision-makers from around the world about the critical issues they consider when selecting a CMO, a leading 71% said it was ‘very important’ that they be able to establish a good working relationship--with another 27% indicating this to be important (see 

). In other words, virtually all decision-makers these days recognize the importance of a good working relationship. 

This consideration has been moving up the rankings over the years. Of the 19 factors assessed, it was the fourth-most important back in 2006, before moving to the second spot in 2010 and now the top position by a fair margin. The next-most recognized factor this year was sticking to a schedule, deemed at least important by almost 95% of survey respondents. While this would seem intuitively obvious, the fact that this issue continues to appear year-after-year, suggests little is being done within the industry to address the problems. 

Clearly, as this highly technical industry matures, customer service and establishing good client-vendor relationships are being perceived as more important attributes. But there are multiple factors that can jeopardize them. The CMO market--particularly for non-commercial scale manufacture--is competitive. CMOs are juggling multiple projects at the same time, and when clients select the lowest bidder, it’s not hard to understand that some CMO projects may not keep to schedule, despite everyone’s careful projections and planning. Add to this the uncertain nature of process development and problems that invariably arise, and it is easy to see how scheduling can be challenging. 

That doesn’t make scheduling any less important, of course. Even small-market biopharmaceuticals typically involve sales of at least $200 million/year, such that each delayed work day in getting a product to market can represent a loss hundreds of thousands of dollars in sales, if not millions. As a result, clients and CMOs want to plan ahead and reserve enough time for crucial methods and technology transfer activities, as these almost always take longer than expected. 


Selecting the right CMO is a labor-intensive process, and with good reason. As sponsor companies increasingly outsource high-value activities previously deemed core in-house ones, they must take greater pains to ensure that they pick the right partnerships. Clients are seeking an increasing volume of available information about CMOs before they begin their due diligence.  This type of vetting process allows for potential problem areas and questions to be identified at an early stage. As a result, it can take three or more months to build a rapport and start a project. And as the BioPlan study indicates, these first few months are crucial for both parties to build trust and a sound relationship. That relationship requires cooperation and flexibility, as well as the ability to understand the other side so as not to make unreasonable demands. 


CMOs themselves have something to say about all this as well. In past years, BioPlan has found widespread complaints from CMOs regarding excessive client demands such as

 “Clients don’t build in sufficient time for the project (unrealistic timeframes)”

“Clients want to contain cost by doing limited development runs, but still expect successful full-scale manufacturing”

“Clients expect us to resolve the most difficult scientific or technical problems.”

Last year, each of those complaints was cited by at least 9 in 10 CMOs as being a “very” or “somewhat common problem.” Each problem had also been cited by a larger share of respondents than in prior years. 

These are issues that can presumably be dealt with or even avoided if the contracting parties invest the effort to build solid relationships. But the data suggest that from the CMO perspective, clients have unrealistic expectations and simply may not be familiar with complexity of CMO operations--this suggests CMOs need to spend time upfront clarifying the overall project. The results also suggest that the majority of biomanufacturers, who are under increasing cost and time pressures, are pushing that stress onto their CMOs, potentially due to a lack of experienced staff dealing with CMOs and bioprocessing outsourcing.

Sponsors want CMOs to effectively handle tough issues

CMOs are being increasingly asked to quickly resolve tough problems, including cross-contamination issues. When BioPlan evaluated the changes over the years in how important clients/sponsors have considered various factors when selecting a CMO, we found a sizable increase in the share of respondents indicating that it’s “very important” that CMOs “effectively handle cross-contamination issues.” That consideration rose from 26.4% of respondents in 2006 to 60% this year, with that 33.6% point change the largest of any factor (see 

Close behind, “provide lead times to cover technology transfer” (+32% since 2006) and “protect intellectual property” (+31.7%) have also seen considerable increases in client concern, potentially due to heightened perception of these risks.

By contrast, factors that have become crucial to fewer respondents over the years include having production platforms relevant to the client’s product. This is likely due to most CMOs having probably worked with many of their own and clients’ production platforms, and should become less of an issue over time as production platforms continue to increase and become more standardized. Capacity-related concerns in the context of CMOs have also decreased, with this likely associated with the current lack of any industry-wide capacity shortages and with CMOs simply not seeking or taking on projects beyond their capacity. 


  Results from the BioPlan study show that clients continue to seek better relationships with CMOs, and that reliability is a key trait they look for in their partners. Technical considerations obviously are paramount, too--there should not be a big difference between results at small scale and large scale when a CMO has been engaged, and clients will always demand expertise and quality. 
But the trends in the data suggest that as the CMO market becomes more competitive and globalized, these sorts of qualities are being seen as prerequisites, and that questions of efficiency, timeliness, and reliability are coming to the fore. In essence, the technical expertise gets the CMO a seat at the table, but nowadays it’s the relationship that will seal the deal. 


Eric Langer is president of BioPlan Associates, tel. 301.921.5979, elanger@bioplanassociates.com, and a periodic contributor to Outsourcing Outlook.    

Sponsors are demanding high levels of professionalism, performance, and effectiveness in managerial areas to accompany CMOs?' technical expertise.

Study: CMO Technical Expertise is Not Enough

Counterfeit drugs, which include cancer treatments, lifestyle drugs, and common prescriptions, such as painkillers and antibiotics, are an insidious, global public health threat (1, 2). “Counterfeiters come in where controls are weak and where they can find value,” notes Bill Fletcher, managing partner at 

. “Typically they produce counterfeit drugs and then exit before they are found; we only find out later from investigations. Brand owners, however, need to focus in on this problem now because it can have a huge cost. We’re one situation away from having a real backlash.” 

Various packaging technologies, such as tamper-evident closures and authenticity identifiers (e.g., holograms, taggants, security inks), are available to help combat counterfeiting 

). Packaging alone, however, doesn’t stop counterfeiters, says Fletcher, “Counterfeiters are adept at making authentic-looking packaging. Authentication technologies, such as holograms or marks on the package, are not effective at the consumer level because consumers typically don’t know what the authentic package or medicine should look like or if a change was made by the manufacturer.” 

Governments around the world have been stepping up to create legislation and systems designed to protect their drug supply chains. Most of these systems attach a serial number to a package and use a central database to verify that drugs being bought and sold match up. Serialization is already in effect in Turkey, Argentina, and for some drugs in China. In Brazil, new requirements begin in 2016. In the European Union (EU), the Falsified Medicines Directive was instituted to combat counterfeiting through various measures, including a requirement for pack serialization beginning in 2017.  

In the United States, the federal Drug Quality and Security Act (DQSA) and more specifically the Drug Supply Chain Security Act (DSCSA), referring to Title II of the law, was signed into law Nov. 27, 2013 (3). This federal law preempts a California state law, which would have required phase-in of a serialization and pedigree system for pharmaceutical packages in the state beginning in 2015. Under the DSCSA, companies in the supply chain will be required to have transaction records and verify that all trading partners are authorized distributors by Jan. 1, 2015. The law also provides specific requirements to quarantine and investigate suspect product based on packaging lot number or serial number. In June 2014, FDA released draft guidance on identifying and investigating suspect product (4). Serialization of saleable units and cases will be required by Nov. 27, 2017. A full pedigree system, which involves a unit-level track-and-trace system to document whenever a product changes ownership, must be implemented over the next 10 years, by Nov. 27, 2023. 

spoke with Fletcher about how companies should be preparing to meet the requirements of the DSCSA. 

: What do drug supply-chain companies need to understand about how the law applies to their activities? 

: The law defines manufacturer, exclusive distributor, wholesaler, and other supply-chain participants, and companies can fall into multiple categories with different responsibilities under the law. As a company develops a list of requirements and a solution for serialization, these categories should be considered. For example, wholesalers are defined as someone other than the manufacturer, but a company could be a manufacturer for one drug and a wholesaler for another.  There are a number of exemptions under the law for distributors, dispensers, and wholesalers, and companies need to understand what applies to them. 

: What do companies need to do now to comply with the DSCSA?
  

: Beginning Jan. 1, 2015, companies must verify that all trading partners are authorized distributors of record (ADR). Most companies already have a standard operating procedure for verification, but it may not meet the requirements of the new law. The verification process must include quarantine and investigation of suspect products, which may impact a company’s ability to effectively distribute goods. 
Also beginning Jan. 1, 2015, each entity in the supply chain must pass along a document that contains 10 transaction details for each item and packaging-lot number combination, the transaction history of the product, as well as seven statements related to the authenticity of the product (e.g., a statement acknowledging that you have not knowingly shipped suspect product). An exception to the transaction requirement is that the wholesaler, in certain situations, does not have to pass the original transaction history from the manufacturer but can start the history with their own data. All companies must capture, record, and maintain this information for six years, and companies must be able to readily provide data upon request from federal or state officials. Many companies already have transaction data but are not currently storing it in a manner that can be used later. The initial transaction from the manufacturer to the wholesaler is likely to come in the form of an electronic data interchange (EDI), and companies must be sure they are storing this EDI message in a useful way.  

Companies should work now towards building systems that can produce transaction statements and store data for use. The final FDA guidance detailing what the transaction statements should look like may not be released until as late as Nov. 27, 2014, but companies will need to comply by Jan. 1, 2015. 

: What are the serialization requirements under DSCSA?

: Serialization requirements will be phased in over several years, depending on where you fit in the supply chain, beginning Nov. 27, 2017. A unique identifier will be required on saleable units and cases. There is an exclusion for products that require a unique device identifier rather than the standardized numeric identifier (SNI) used for drug and biologic products; you need to make sure you understand which category your product falls into. The SNI for serialization under the DSCSA includes the national drug code (NDC), which encodes the manufacturer identity, drug identity, and package configuration into a 10- or 11-digit number. The law requires both a printed human-readable code and a two-dimensional data-matrix symbol containing the NDC and the serial number that can be scanned using a barcode reader. If desired, companies can also include other data, such as lot and expiration date, in the data-matrix symbol. Many companies have decided to follow the GS1 standard, and they are not precluded from this under the law; they can encode the NDC in a GS1 global trade item number. Companies are also looking at identifiers that can be used with other technologies, such as radio-frequency identification (RFID), which are already being used in some cold-chain solutions. Warehousing is often overlooked; companies should consider material handling requirements for serialized goods at the warehouse level.  

Companies are currently focused on these 2015 and 2017 deadlines. This year, they are preparing for transaction statement requirements. In 2015 and 2016, they will build serialization readiness and flush inventory so that by 2017, all inventory will be serialized. 

Within the next 10 years, FDA will work toward a true pedigree system, but companies realize that technology is changing too quickly to take action on 2023 requirements today. The way products are identified, perhaps with RFID or near-field tags, might be vastly different in 10 years. 

: What else should companies consider in developing a serialization solution?


: You need to include variability and flexibility into your solution. Laws can change. Companies were focused on upcoming California regulations, for example, then along came new regulations from Turkey, and they had to change their solution. There are variations in how packages are identified or coded around the world. China has unique requirements because it is a non-GS1 standard, and Brazil has a different spin on how they allocate serial numbers. These issues need to be considered during planning for a serialization program, whether you currently trade in these areas or not, because business leaders may decide to trade products there in the future.  Ensuring solutions support all world requirements is possible and has been accomplished by several companies.

Each person needs to align with a strategy so everyone knows what is going on and what their role is. Companies should put together a roadmap and clearly define their requirements specific to their business systems and practices. Each company, for example, has different versions of enterprise software (e.g., SAP), different packaging practices, and different warehouse practices. After defining this plan, a company can decide what vendor will meet their requirements.

Today, companies should establish work streams today for packaging serialization, warehouse handling, distribution and transaction documentation, and suspect product verification. 


  1.	World Health Organization, “Medicines: spurious/falsely-labelled/ falsified/counterfeit (SFFC) medicines,” Fact Sheet No. 275, May 2012.   
  2.	M. Kitamura, “ Fake Antibiotics Feed Growing Worldwide Superbugs Threat,”  accessed June 17, 2014.
  3.	FDA, “

,” accessed June 23, 2014.
  4.	FDA, “FDA issues draft guidance on identifying suspect drug products in the supply chain,” Press Release, June 10, 2014. PT

Supply Chain

An expert discusses how companies should be preparing to meet the requirements of the Drug Supply Chain Security Act, which requires phase-in of requirements to prevent counterfeiting.