Life Sciences Manufacturers Face Growing Pressures for Quality Improvement

While the biopharma industry needs to deliver new products while meeting quality standards, these expectations many not be met across the board in the near future given FDA requirements and practices.

Drug product shortages are making headlines as the Food and Drug Administration (FDA) engages with pharmaceutical manufacturers and patient advocacy groups over how to improve the supply of critical drugs while Congress investigates price gouging on scarce drugs. Key strategies can be examined and applied across other industries to overcome challenges related to quality, economic pressures and balancing regulatory and consumer demands with financial realities.

According to a recent Associated Press article, "...the Food and Drug Administration says the biggest cause is manufacturing-quality problems that cause drugmakers to shut down production while they make improvements. In addition ...some generic drugmakers have decided to stop making certain drugs because they bring little profit. When the maker of a particular generic drug stops producing it, other companies don't have enough capacity or time to make up the shortfall before the halt starts hurting patients."

While the FDA identifies manufacturing quality and unattractive profit margins, there are other factors that significantly contribute to current drug supply shortages. The estimated cost of a single FDA drug approval exceeds $1 billion and typically takes longer than a comparable approval by the European Medicines Evaluation Agency (EMEA). The FDA has been criticized for a "one-size-fits-all" approach to its clinical trial requirements and for declining approvals for drugs deemed safe but not significantly more efficacious than a currently available drug.

The current approach raises the question as to whether the FDA should focus on safety and leave the issue of efficacy to physicians and their patients. Approval of more "safe" drugs would create an incentive for manufacturers seeking a return on capital investments and would foster more price competition in the market.

Another element contributing to drug product shortages is the slow adoption of new process technologies in life sciences manufacturing. The FDA requirement that manufacturing processes -- and related software -- be validated is necessary, but it results in higher personnel and technology costs, increased start-up and production time and lost revenue.

Additional factors that may impact future drug inventories include the 2010 Patient Protection and Affordable Care Act's (PPACA's) new tax on medical device companies -- many of which also produce pharmaceutical products. The tax liability has reduced available capital for drug research and development which, in turn, will limit the number of potential drug candidates. The PPACA also provides a pathway for the approval of biosimilars (generic, follow-on versions of biological drugs produced from DNA-derived protein), which could reduce financial incentives for developers of novel, branded drug products.

Despite operating under a myriad of global regulations and the complexities of biology, chemistry and physics in manufacturing processes, leading life sciences companies are taking steps to overcome these challenges. After decades of appropriate focus on R&D, smart companies are investing more heavily in manufacturing software and strategies that will improve the quality and predictability of supply and reduce production costs.

Important technologies include (1) specialized IT systems that help characterize drug candidates earlier in the discovery and development phase and optimize the production of commercial-stage products, (2) electronic lab notebooks, (3) manufacturing execution systems (MES), and (4) data aggregation and analytics solutions designed to unify all relevant data from raw materials and clinical trials to final product and patient outcomes -- wherever located around the globe. Leading companies have already executed on these approaches and improved process and product understanding and quality, reduced costs, accelerated commercial release, enabled maintenance of a lean supply chain and extended patent protection on strategic products.

Pharmaceutical companies are increasing partnerships with competitors for discovery efforts and manufacturing operations to leverage industry-wide expertise. This collaborative approach allows companies to focus on their own areas of expertise, better utilize their own manufacturing capacity and realize a better return on their invested capital as a result. Companies are also in-licensing (and out-licensing) drugs and drug candidates to better align capital expenditures with expertise and prioritized market opportunities.

While many early-stage companies rely solely on partners for their manufacturing, even large, global leaders are planning to utilize third parties for a substantial portion -- if not all -- of their manufacturing needs. Expanding a manufacturing network to outsourced sites, however, can add more complexity to the quality and data management challenges of drug manufacturing. There is pressure on contract manufacturers to invest in the same technology their sponsor company partners use in their captive facilities.

The expectation bar is set high in the biopharma industry to deliver new, efficacious products to market while meeting demand and quality standards. These expectations many not be met across the board in the near future given FDA requirements and practices, but aggressive companies will innovate in the areas of product development and manufacturing and will expand their partner networks to fully leverage industry-wide expertise. Look for new strategies and learning experiences, such as increased M&A activity and deployment of smart technologies, during the exciting next stage of manufacturing innovation.

Robert Di Scipio is president and CEO of Aegis Analytical, a provider of manufacturing and process intelligence software.

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