CPhI Worldwide has announced the findings of its 2015 annual report: part iii, Push-Pull Factors on Growth. Four world-renowned experts – Dilip Shah, CEO at Vision Consulting Group, Vivek Sharma, CEO, Pharma Solutions, Piramal Enterprises, Prabir Basu, Consultant, and Alan Sheppard, Principal, Global Generics, Thought Leadership at IMS Health – look at the implications of US trade law regulations on generics access, the growth of steriles manufacturing and outsourcing, and the positive impact that QbD, ‘technology commons’ and ‘outsourced regulators’ could bring to bear on improving manufacturing standards.
The overall findings reveal that our experts are apprehensive on both the trend towards outsourcing and generics growth. Outsourcing is predicted to grow strongly, particularly in lower cost regions, but without proper oversight, we may be at risk of single negative incident casing a knee-jerk reaction and drug shortages.
For generics, the panel predicts that in the EU, USA and the developing world, they offer clear benefits to reduce healthcare expenditure. Alan Sheppard strongly argues that we need to act now and start reducing any current negative incentives to increased generics adoption, and that we need a sensible pricing solution to increase use of generics rather than policies to lower their cost.
In his article, he outlines how generics stimulate innovation in both the generics sector through improved efficiencies, but also, in drug discovery and development, and pharma should be less weary of their global impact.
However, Dilip Shah warns that the reauthorization of the TPA-2015 will fast track the mega-trade agreements that are poised to have the unwanted effect of significantly slowing global access to generics. The clear implication is that these changes are being put in place to benefit Big Pharma at the expense of patients, generics companies and healthcare bodies.
He predicts that, as soon as 2017, we will begin seeing a slow down in the generics market, with the full impact of these ‘mega-trade deals’ being felt in 2020. The most notable effect will be a reduction in generic competition, an increased ability for pharma to dictate prices in emerging markets and an easier process of patent extension. Dilip commented: “If the TPPA is signed in 2015, it would begin from 11 Pacific Rim countries and accelerate with the conclusion of TTIP in 2016. The decline will extend to the US and 28 EU countries, besides members of NAFTA (2) and EFTA (4). The full-blown impact of these mega trade deals will be felt by 2020.”
In his article, Vivek Sharma of Piramal predicts a hugely positive outlook for global steriles sales and anticipates that we will see a significant expansion – 10% per year – in this market during the next 5-years. The drivers for growth in outsourcing are primarily coming from a need for Big Pharma to derisk its supply chain using secondary manufacturing sites. It is also telling that pharma is seeking specialist CDMOs with technological capabilities beyond that of in-house pharma. In the longer-term, it is foreseen this will lead to a consolidation amongst increasingly large players offering bespoke biologics and sterile services.
Novel drug delivery systems and prefilled synergies are also a key factor in growth as they overcome potential compliance issues. Interestingly, whilst currently far smaller than the biologics sector, small molecule injectables are predicted to experience the fastest rate of growth. In the near team, drug delivery systems such as liposomes, PEGlyation and depot injections are also projected to see a spurt in the growth – especially in therapeutic segments that require efficient drug targeting.
Prabir Basu, in contrast, sees a mixture of opportunities and threats facing pharma manufacturing. In his view, we need to start evolving our approach to regulation; primarily, we need to start encouraging the sharing of techniques (technology commons) for the good of the industry – rather than keeping the majority of manufacturing process as proprietary.
Forebodingly, he also warns that if we don’t think about our approach to quality and outsourcing, there is a possibility of another heparin type incident. Such an event may even result in an overreaction to outsourcing by regulators and ultimately lead to crucial drug shortages as the industry attempts to adapt.
Pharma is presently focused on transferring its manufacturing outsourcing to the lowest cost base, rather than taking an approach of improving costs through process efficiencies — as many other industries have successfully achieved (notably the car industry in Japan). Prabir’s supposition is that these cost reductions may, in part, be lower simply due to a lower regulatory compliance, and FDA is unsuitable to monitor facilities on a global scale with the required regularity.
He does, however, put forward an innovative solution, whereby the FDA trains a fleet of private certified experts that can inspect all facilities globally at least once per year and the costs should be born out by the industry (rather than by the US government as is currently the case with the FDA). Then, once these new quality cultures are embedded, QbD will reduce the need to inspect facilities so often, as process controls will be tighter.
Chris Kilbee, Group Director Pharma at CPhI, noted: “Our goal at CPhI Worldwide is to provide a platform for the industry to share information, debate best practices and support pharma innovation. To help achieve this, in 2015, we expanded our content initiatives to include the CPhI annual report, alongside the pharma insight briefings, the pharma awards, exhibitors’ showcase and the pharma forum. We strongly encourage all our attendees and the wider industry to study the annual report findings closely.”
“For instance, the conclusions that generics, high-potents, steriles and outsourcing are forecast for renewed growth means it is vital that CPhI Worldwide provides a global hub for partnerships to be harnessed through the ingredients zones at CPhI and through our sister brands ISCE, P-MEC and Innopack, respectively. Ultimately, it is the dissemination of these trends, potential industry threats and predictions that will sustain further growth during the medium- and long-term. CPhI is the global stage for this debate and our exhibitors and attendees should use these vital insights, alongside our other content initiatives, to ensure they have the best strategic analysis and information to support the most productive business decisions at the show and over the next year,” he added.
The unedited articles will be featured in the CPhI Annual Report (parts i-iv). For more details or to review part iii of the annual report online, please visit: http://www.cphi.com/europe/networking/cphi-pharma-insights.