March 8, 2017 PAP-Q1-17-CL-016
Though innovator drugs will continue to contribute to this growth, especially in the way of advanced biologics, generic injectables are following suit with generic medications overall and are growing at a much faster rate.
Led primarily by China (CAGR 13%) and other emerging nations (CAGR 12%), the growth of the overall generic injectables space is expected to continue at 10% annually.3 With a steady flow of abbreviated new drug applications as key injectables approach or are already at the patent cliff, this number is only likely to grow, and manufacturing efficiency, agility and reliability will become the defining attributes of desirable supply chain partners.
Injectable drugs come with complex sterility requirements and, for these drugs — innovator and generic alike — to be truly successful in the market, they must meet quality expectations while making it to market as quickly as possible.
To meet this new set of demands without having to establish the necessary expertise or invest in costly equipment, many pharmaceutical and biologic companies are turning to contract development and manufacturing organization (CDMO) partners that can assist with early development work and offer batch flexibility and speed while still flawlessly hitting quality targets. Currently, the total CDMO injectable market is growing at a CAGR of 11%, 4% higher than the overall global CDMO market.2 With companies continuing to recognize the value of manufacturing partnerships, CDMOs are pressured to deliver on quality promises without hindering launch, which will require the mastery of a full suite of services and the ability to demonstrate added value in a typically cumbersome supply chain.
First-mover advantage (FMA) is a coveted position for marketers in any industry. For those within the pharmaceutical industry facing a market that is littered with com- petition and, especially in the case of generics, is extremely price sensitive, FMA is almost a necessity. This position is so advantageous in many cases that researchers at Duke University studied promotional and market-share data to develop a pharma-specific formula for predicting the added benefits of FMA.4 Though several factors can contribute, the researchers found that second-to-market drugs lagging behind their first-to-market counterparts by as little as two years can only capture 38% of the market at launch.4 This can mean the difference between success and failure in the market and — especially when making the added investment to pursue an injectable formulation, of which there are currently 1,699 unique products on the market (including all doses) — can be a costly error.5
Currently, generic medications only comprise approximately 22% of total prescription sales, but their share of filled prescriptions has risen rapidly over the last two decades, from 19% in 1984 to 88% in 2015.6 The volume-to-value relationship here highlights the cost competition in this market, most of which is caused by low-cost import products driving down costs and increasing the pressure on U.S. manufacturers.6 This gap between volume and value also helps explain the growth of generics in the injectables space, as generic injectables are typically able to command a higher cost and face decreased competition when compared to their oral equivalents.1 However, the push toward injectables is as driven by price and, in many cases, necessity as it is by patient demands for more convenient and effective options.
This new patient-centric focus will be critical for market success in the future, but finding the perfect balance between convenience, effectiveness and affordability (from the cost-to-value perspective) for medications can be challenging for companies without expertise or proper equipment. Relying on outsourced manufacturing should allow companies to reduce time to market and benefit from not only expertise, but also a collaborative partnership and unmatched quality. Working with a CDMO — such as Grand River Aseptic Manufacturing (GRAM), a Michigan-based, parenteral CDMO — capable of guiding a product from development through fill-finish is even more valuable, as potential pitfalls can be overcome in clinical stages, preventing potential delays or shutdowns. Of course, handing responsibility off to a third party carries its own risk, which is why true partnership through transparent communication is a critical component for these relationships.
This atmosphere helps explain why the 2017 Nice Insight Contract Development and Manufacturing Survey found reliability as the number one priority for respondents seeking an outsourcing partner.7 Most interestingly, reliability has ranked second to quality for the last three years of this survey, and this shift in 2017 is perhaps due to reliability being viewed as an all-encompassing, rather than singular, trait. Speed remains critical and cost is important, but neither should come at the expense of quality and, arguably, the three combine to form a reliable supplier. Quality, however, is at the crux of this reliability with injectables, as it is especially critical for this delivery method.
When engaging with a CDMO partner for the development and/or manufacture of a parenteral medication, biologic and pharmaceutical companies alike are purchasing a certificate of conformity as much as they are the finished product.8 Quality and compliance are the foundation of a reliable CDMO or any contract partner, but the quality, purity and sterility standards applied to injectables are uncompromising. Over the last several years, the industry has seen quality issues and warning letters arise in injectable manufacturing facilities, especially in emerging markets like India, which has seen its share of FDA issues with, among others, Pfizer and Wockhardt facilities both receiving negative marks from the agency due to Current Good Manufacturing Practice (cGMP) violations.9 In the case of Wockhardt, these findings even prevented export to the U.S., which was the primary purpose for the new facility.9
Currently, approximately 30% of injectables are being manufactured by CDMO partners, making the impact of a violation and/or a shutdown potentially devastating to companies and even more so to patients if a shortage were to occur. Recognizing the damage that can come with an FDA warning and the importance of maintaining quality in the face of increasingly aggressive market launch time lines, GRAM focuses heavily on the agility of its manufacturing processes while keeping quality as bookends every step of the way. To deliver on this commitment, GRAM views every client engagement as a partnership in need of transparency, undivided attention through a dedicated project manager, and quality by design (QbD) built into the day-to-day. With two state-of-the-art cGMP facilities and not a single 483 from its most recent FDA audit, GRAM offers everything from robust analytical and development services to lyophilization, terminal sterilization and even distribution, while treating every client product like it is their own.
Though product quality issues can arise for a myriad of reasons throughout manufacture (e.g., inferior active pharmaceutical ingredients, poor manufacturing processes, inadequate packaging, etc.), quality risks are heightened as the sup- ply chain deepens and the drug changes hands.8 As companies look to mitigate risk in the chain and simplify manufacturing, full-service CDMOs such as GRAM, who offer quality aseptic processing along with complete custom labeling, packaging and kitting (a big advantage given the looming implementation of serialization requirements under the Drug Supply Chain Security Act), become increasingly valuable.
In pharma, ‘quality’ is a word that is easily and frequently thrown around but, as a well-rounded concept, it is often difficult to deliver in full. As patient demands for convenience and affordability mount and the industry shifts from the ever-popular vial — currently accounting for 73% of all injectables — to prefilled syringes that are already gaining in popularity, this need for quality from start to finish may evolve, but it will not diminish. To keep up with these changes, CDMOs will remain a vital part of the injectables supply chain, and those with core operational efficiencies designed to handle the full range of injectables (i.e., small molecule and biologics) will offer the most value. With a range of services and the agility required to respond quickly to customer needs and market demands, GRAM is prepared for the injectables market and, most importantly, the quality that should define it going forward.
Nick Bykerk studied finance at Calvin College and proceeded to work in the manufacturing industry as a public accountant. Passionate about fast-paced, growing business environments, GRAM was a natural fit. Since joining GRAM in 2012, his areas of responsibility have grown to include finance, supply chain and business development. Prior to GRAM, he held positions at Plante Moran and Lakewood Process Machinery, LCC.
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