What criteria should drug manufacturers consider when choosing API sourcing partners?
Generally speaking, manufacturers need to think about the long-term stability of their partner. Can they offer sustained supply of a high-quality product at a competitive price and is their service flexible enough to meet your requirements?
Quality is one of the most important factors when sourcing APIs. Drug manufacturers should be looking for partners with strong cGMP compliance records. Pricing is also important, however it’s vital to strike the right balance, namely getting the highest quality for the best price. The cheapest price is not always the most cost-effective option as non-compliant product can be costly further down the line. As such, manufacturers should prioritize other criteria ahead of the initial costs.
Companies should also consider how important the project is to their API partner and how responsive they are during the inquiry stage. This will give an indication of the level of service they can expect during drug product development and commercialization process.
For future generic molecules that are still under patents it is also important to select a supplier who can adopt the appropriate approach and handle collaboration across multiple partners, while fully respecting third party´s intellectual property rights.
What are your customers’ main concerns when deciding to source APIs from a particular supplier?
Often the biggest concern for a CDMO’s customers is sustainability of supply. As a result, CDMOs with in-house raw materials capacity or strong links with suppliers are sought after by drug manufacturers because they can reduce the likelihood of there being shortages and ensure on-time delivery. These CDMOs also streamline supply chains, which can speed up the API manufacturing process.
For example, at Saneca we have in-house morphine extraction and as a result, we have a broad portfolio of narcotic APIs. Constant access to our own internal supply of raw materials means that we have ultimate control over our operations. This allows us to demonstrate long-term supply capabilities and also offer competitive pricing.
The pharmaceutical industry is highly regulated, particularly in markets such as the US, Australia, Japan and Europe. As such, another big challenge that companies face when sourcing APIs is ensuring their suppliers can offer high quality APIs at a reasonable price and that they can supply all the relevant documentation to ensure compliance. If an API manufacturer fails to meet any of these parameters, it can have an impact on supply to market.
What steps do drug companies need to consider when arranging to have APIs shipped to their facilities?
The first thing to consider is qualifying your supplier and determining whether it has the capacity to produce your API to the desired specifications. The best way to do this is to provide a trial quantity for testing.
The supplier also needs to provide its registration documentation in order to get included into a marketing authorization (MA) before commercial supply can be initiated. This registration documentation can be either a Certificate of Suitability of the Monographs of the European Pharmacopeia (CEPs), an Active Substance Master File (ASMF) or a Drug Master File (DMF), depending on the market for which the product is intended.
Additionally, if the API in question is an opioid, customers (or their CDMO) need to make sure that they have a controlled substance license for general handling in place, as well as arrange for import and export permits for each shipment, as these are essential for international trade with opioids.
Stability studies are also a vital part of determining the type of packaging material and transportation or shipping conditions and must be carried out as standard. All this information must then be stored in the Active Substance Master File so that it can be accessed at any time during a product’s journey through the supply chain.
Campaigning group SumOfUS and others have called on drug companies to consider the environmental credentials of potential API suppliers. What impact would this have on the way Western drug firms source APIs?
In recent years, an API supplier’s environmental credentials have become increasingly significant for pharmaceutical firms. This means that many drug firms, particularly in the western world where the environmental impact of operations is being heavily discussed, are starting to include specific accreditations within requests for proposals (RFPs).
A growing number of customers routinely ask potential CDMOs what steps are being taken to maximize energy efficiency, reduce carbon footprint and convert manufacturing processes to incorporate greener chemistries. As a result, CDMOs seek accreditations such as the ISO14001 qualification as a matter of course.
It is often estimated that China and India supply most (80%) of the APIs used in the West. How do you see the situation evolving over the next few years?
A lot of APIs do come from China and India; There are a large number of manufacturers located in those countries and they have access to the domestic raw material. This, combined with a mass production model, has meant that in the past there was a perception that these manufacturers were cheaper. However, we are now seeing a shift towards manufacturers in other parts of the world.
Partly, this is because higher production standards and labor costs mean manufacturers in India and China are starting to charge more for their products. This means manufacturers elsewhere, particularly in Europe, are becoming competitive alternative. In addition, the intellectual property (IP) and patent understanding is changing in India and China, which is also increasing prices.
In reality, customers should select suppliers offering the best price, not the cheapest. Only the right partner with the right equipment and well-trained staff can achieve the quality needed to supply to highly regulated markets, such as Europe and the US.
In short, the API market is evolving. As such, it is likely we will see European suppliers, or indeed those in the US, become the go-to-choice for manufacturers, particularly for speciality APIs and those requiring careful handling.
Narcotics are a good example of this. There are multiple chemistry steps required to produce them and their characteristics make handling them much more complex. Narcotic API suppliers originating from regulated markets with the right expertise are ideally placed to deliver these types of APIs and keep their pricing competitive. Narcotics also have stricter import export laws and that is why currently we only see a limited range of common thebaine-based and synthetic narcotic APIs being exported from India and China.