Maslow wrote, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” For decades, Pharma’s been engineering its own “hammer,” creating development and production methodologies that tended to treat every potential drug candidate like the proverbial nail. To many, Pharma’s hammer became too heavy to wield, not only inefficient at driving Pharma’s traditional solid-dose nails but increasingly ineffective at addressing quality issues at the manufacturing level for biopharmaceuticals. Since FDA promulgated Pharmaceutical cGMPs for the 21st Century: A Risk-Based Approach, drug makers have invested in its principles slowly if not grudgingly — with some more enthusiastic about it than others, but to a certain extent, it’s now generally accepted as the gospel truth. As many should be aware by now, the FDA’s first principle leaves little doubt about regulators’ intentions: “To encourage the early adoption of new technological advances by the pharmaceutical industry.”
Janet Woodcock, director for the Food and Drug Administration’s (FDA’s) Center for Drug Evaluation and Research offered this at PDA’s 2014 Annual Meeting: “The pharmaceutical manufacturing landscape has really changed over the past decade and is continuing to evolve rather quickly,” she said. “FDA’s regulatory approach is also going to have to evolve to keep up, and some of the most significant changes — including the massive shift from domestic to overseas manufacturing sites, which has affected all of you as well as the FDA — [plus] rising contract manufacturing, the fragmentation of stages of manufacturing, not only by ownership but also by geography and diversification of suppliers.”
Woodcock and her regulatory colleagues have also recognized that in spite of its intentions framing Pharmaceutical cGMPs for the 21st Century, the agency’s own compliance infrastructure became a barrier to adopting the principles of its own guidance. In response, Woodcock offered PDA’s attendees this: “So we’re going to set up a team to deal with really advanced manufacturing so that you would have ‘go-to’ people. If you want to establish some advanced technology you can talk to that team — they would help shepherd it through the regulatory process, including continuous processing, using statistical process control.”
Alas, “encouraging” the industry to do something is one thing; actually getting it to do something is another! OK, so folks’ heads are in the right place, but in the great continuum of Pharma manufacturing, where is the industry these days when it comes to living the philosophy in day-to-day manufacturing operations?
Recent data does show capital is being carefully invested in “current” process and manufacturing technologies, purchasing that’s supporting a slow but continuing retooling to address the market’s crazy complexity.
GE Capital’s 2014 “Healthcare Industry Economic Outlook Survey” queried 86 middle market healthcare industry service and product firms ranging from $10 million - <$1 billion in sales. According to GE Capital, the majority expect capital spending to remain flat with about 30 percent planning a modest (1 to 5 percent) increase. While GE Capital’s findings included companies outside pharmaceutical manufacturing, the results provided a benchmark within the sector. GE Analysts found one of the more “significant” insights to emerge from the study included the opinion that firms are facing margin pressures due to the challenges of growing revenues while coping with the costs of business.
GE Capital highlighted the fact that capital expenditures are likely to focus on replacement of existing equipment, infrastructure maintenance and new equipment purchases. Although recent industry studies reveal a general leveling off with large-cap Pharma moderating capital spending, spending activity from mid-cap firms — like the generic producers, CMOs and the CRDOs — may be ramping up to capture the business that’s being shed by larger Pharma. GE Healthcare analyst and senior vice president Savant Ahmed added this color to GE’s findings: “I think what you’re seeing is actually fairly interesting,” says Savant. “We are seeing the same trend now spreading to [companies like] Teva and Activis — as well as more of the [biopharmaceutical] pharma side as well.”
Savant notes those firms are pretty big in their own right and are carrying some of the same burdens that large-cap Pharma firms used to have exclusive rights to. “With those larger companies, you see CapEx coming down. I think the lag is being picked up by other companies, but it’s being done in two ways: One, they’re just taking over the capacity that large-cap pharma is getting rid of. So it’s not new CapEx. It’s basically transfer of assets, so the implications of that are different than if it was like new business.”