Finding Pharma Manufacturing’s Innovation ROI

A recent panel discussion at BIO 2014 magnified three topic areas: the ROI on quality and innovation, where best biopharmaceutical manufacturing might take place and what the industry can do with its regulatory partners to achieve quality through compliant manufacturing operations.

By Steven E. Kuehn, Editor-in-Chief

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In 2010, McKinsey published a study citing that improvements to pharmaceutical manufacturing efficiency could translate into an estimated savings of $50 billion, mentioned Joan Koerber-Walker, president and CEO of the Arizona BioIndustry Association, as she introduced “Maximizing the ROI in Quality Innovation” a recent panel discussion at BIO 2014 in San Diego. Koerber-Walker said that “potential” opportunity is now more like $150 billion, triple the original McKinsey figure.

Participating on the panel was James Hamilton, a consultant and 30-year veteran of the U.S. Food and Drug Administration, Kurt Brorson an FDA research biologist and Martin VanTrieste, a vice president at Amgen. Introducing the panel, Koerber-Walker explained that the discussion was designed to magnify three topic areas including the ROI on quality and innovation, where best [biopharmaceutical] manufacturing might take place and what the industry can do with its regulatory partners to achieve quality through compliant manufacturing operations.

Brorson, a proponent of proactive outreach – from both sides – shared what CDER and the FDA are doing currently to work more closely with the industry. A good example said Brorson is in the area of directed research. About five or six years ago, said Brorson, the FDA worked with Eli Lilly because the virus filters the company was buying were not quite as robust as they had hoped. Lilly, among other things, wanted to figure out what the technical gaps were with the virus filters to find the best ones. “Together with them, we studied all of the virus filters that were on the market at that time that were directed against small viruses and evaluated failure modes and mechanisms for these filters and came up with a set of recommendations that directed [the application of] these virus filters in manufacturing. Further, CDER worked with the Parenteral Drug Association to do a series of lab-based studies that produced a technical report setting [among other things] nomenclature standards for virus filters. “Together,” said Brorson “we came up with a grading system for virus filters; and this is an example of how we can work together with industry to come up with best practices, understand the technological gaps and set standards once an application is submitted to the FDA.”

Brorson then explained the CDER has been busy establishing the agency’s Emerging Technology Team (ETT). “We know that technology advances every year, especially in biotech,” said Brorson. “There is a heavy industry segment. Technology has made [many] kinds of advances. There are evolutionary advances, which are improvements over existing technology, and then there are revolutionary advances where [industry] leapfrog onto the next technological mode,” he said. “The emerging technology team was set up – this small committee – to address the latter type of those technological [leaps] to get CDER ready for applications that are revolutionary …”

Brorson said to form the committee, FDA drew from all relevant departments “We grouped subject matter experts from all our different offices including the Office of Biotechnology Products,” which administers BLAs and will be the primary point of contact said Brorson.

Brorson said the within the context of the ETT, the Office of Biotechnology Products “will essentially partner with the review office in a cross-cultural nature, so [when] applications come to the ETT, we will … serve as a focal point for the process of review and work together with the review offices to make sure that the process works well. We always care about potential roadblocks that can block … revolutionary … technology. Our role would be to identify regulatory strategy and get around those roadblocks.”

BEEN THERE, DONE THAT
As moderator, Koerber-Walker segued from Brorson’s FDA update, and turned to consultant James Hamilton for his opinion on where emerging companies (which may avail themselves of FDA’s ETT) might go for resources to help them in designing for manufacturability. “Once they get it to the development stage,” said Hamilton, “it’s just exposing them to the regulations, quality, what’s required in quality.” He explained that once these companies get their therapies into the development phase, they need to look at quality by design (QbD) and the role of process analytical technologies (PAT) which may lead them to examine new technologies and production by continuous manufacture. “What I run into is the retroactive approach where you have failures. And then you try to find out what caused those failures. What we’re looking at is trying to be more proactive in coming up with the continuous manufacturing process where … the processes is actually controlling the [quality of the] product.” Hamilton then put up a slide from SEMATECH, which began operating in 1988 as a partnership between the U.S. government and 14 U.S.-based semiconductor manufacturers to solve common manufacturing problems and regain competitiveness for the U.S. semiconductor industry that had been surpassed by Japanese industry in the mid-1980s. The slide revealed the steady progress the semiconductor industry made in pursuing manufacturing efficiency over the last 25 years.

“Well,” said Hamilton, “25 years ago, new technologies were coming through at an ever-increasing rate. [The industry was creating] global supply chains where sources of supply  – components of various products  –  were coming from multiple parts of the world on a regular basis, combined with one product in one region or another. We had major issues with standards across country, country and country and sometimes even inside the same country. And we were trying to figure out how we could get the costs out of the supply chain while maintaining quality, in order to be globally competitive no matter which country [the company is] from. Think about that for a minute.” Hamilton explained that Pharma, like the semiconductor industry back in the day, needs to look at intra-industry benchmarks to seek inspiration and solutions and rally itself like SEMATECH did for semiconductor manufacturers: “it’s only when we come together in a precompetitive environment and say this is how we want to address and solve this problem; it’s the only way we will truly get those costs out of the system.”

Hamilton’s remarks served to frame commentary from Amgen's VanTrieste, which began with a reference to a 2003 The Wall Street Journal article on the sorry state of pharmaceutical manufacturing. The report, VanTrieste said, found that around the world pharmaceutical companies’ manufacturing techniques and technologies were completely outdated. “The [WSJ] simply said the potato chip manufacturers [had better quality and manufacturing processes than] pharmaceutical companies. I’d been around for a long time, so when I read the article, I was a little miffed and a little tore up. Once I got through the denial phase I started thinking, you know, I’ve never had a stale potato chip when I opened the bag and potato chips [are] really, really cheap.”

VanTrieste continued, citing the semiconductor industry’s rise in quality and manufacturing efficiency, and then compared that industry to the rise of Toyota which embraced Deming’s principles, lead a quality renaissance in the automotive industry, and became the world’s largest car maker in a short two decades. “The power of continuous improvement and scientific knowledge of your process and going after variability is very powerful,” said VanTrieste. “But if the car industry performed like what the semiconductor industry was doing – and these are actual facts, by the way – over the last 30 years, a Rolls-Royce would only cost $50.00. It would circle the globe twice on a half-gallon of gas. And it would go 2.5 million miles per hour. Now those things may deny physics … but clearly, that’s the kind of transformation that the semiconductor industry made,” VanTrieste explained, noting that it is probably the best example of the power of Deming’s approach. What’s the power of that in Pharma VanTrieste asked: “You heard $130 billion, and I’d say that’s probably right.” He told attendees that if one were to review a Six Sigma table and look at key quality performance indicators per million and what yield calculation should be, the cost of quality for the pharmaceutical industry is somewhere between three and four. “When I talk to all my colleagues, said VanTrieste, “the cost of quality at every pharmaceutical company is somewhere between 20 and 30 percent,”

VanTrieste illuminated his point further: “If you take a look at a company that has $2 billion in manufacturing costs, you’re talking a large pharma company, large biotech company – if you’re a Three Sigma, you’re spending between four and five hundred million dollars annually on your cost of poor quality. But if you could move that to Six Sigma, you’d reduce that cost of quality to sixty-million dollars. And I think that’s achievable; achievable in my lifetime. [one has to] ask why don’t we change? What keeps us from changing?” VanTrieste closed his remarks citing Amgen’s science-based empirical approach in designing the process to manufacture its very successful RA therapy; which he said performs at Six-Sigma levels. “If you’ve got a high-quality process,” said VanTrieste, “you shouldn’t [have to do] all that testing. We prepared an application to the FDASIA [and in it said] we don’t think we need to do all this testing and inspecting anymore. Here’s our process capability, here’s how we measure it, here’s where we measure it … and here’s the performance. We put a very comprehensive application together, and the FDA [gave us] approval this year …with no questions asked.”

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