June 21, 2022 PAO-06-022-CL-10
Industry experts were selected to participate in the survey on the basis of their roles and experience relevant to the investigation of current and future dynamics in the animal health market. All survey respondents held roles in animal health companies, with 58% representing mid-sized, 20% large, and 22% small animal health firms. Most respondents held director or senior director job titles, with 30% primarily working in business development, 20% in drug production and manufacturing, and the remainder split among other roles critical to manufacturing and outsourcing (e.g., supply chain, external manufacturing, purchasing/procurement, and quality assurance / quality control). Respondents were evenly split between North American and European organizations, and the majority had more than five years of experience within the animal health organization. They represent companies that market a range of veterinary medicine dosage forms, with 74% of organizations having recently worked with liquids and semi-solids, 68% with oral solid dose (OSD) drugs, 60% with injectables, and 26% with inhalers or aerosols.
Outsourced manufacturing clearly continues to play a significant role in the animal health market. Overall, 94% reported that their company currently outsources services or operations to CDMOs (or CMOs), with 82% of respondents themselves being part of the decision-making unit at their firm that is involved in CDMO selection, positioning them well to provide insights into both the difficulties facing the animal health supply chain and the priorities such companies have when evaluating CDMOs.
The first question in the survey asked the industry experts to identify which stage in the product life cycle poses the most significant challenges to their organizations. Procurement of raw materials and the related resources required for developing and manufacturing the product was identified as the greatest challenge (34%), followed by manufacturing and packaging (26%); research, development, and clinical stages (18%); storage and transportation (16%), and finally the sell stage of the product to the final consumer (6%).
The ongoing impacts from the COVID-19 pandemic and the industry’s reconsideration of global supply chains continue to add complexity to the veterinary product life cycle. The primary pandemic-related issue experienced by organizations was a shift in resource allocation from non-COVID- to COVID-related products (60%), but a number of others were ranked highly, including supply shortages of APIs and other raw materials (48%) and disruptions in transportation and logistics (42%).
Similarly, when asked to select the five most significant hurdles their organizations face with respect to sourcing and procurement, the highest-ranking response was identifying and sourcing reliable, high-quality raw material suppliers, selected by 52% of respondents. A number of closely related issues also ranked highly: lack of transparency with vendors, including unavailability of past evaluation metrics and vague specifications (46%); establishing reliable, interruption-free, and timely supply channels for materials (44%); and tracking compliance of suppliers with required regulatory standards (20%).
The responses offered with regard to the most difficult issues at the storage or logistics stage of the product life cycle focused more on the challenges of establishing distribution channels across global markets, with those that respondents identified as the most concerning including understanding import/export requirements and navigating disruptions across global markets, as well as establishing reliable storage and logistics channels across finished products, both of which were ranked among the top five by 64% of respondents.
Development and manufacturing were identified as the most challenging stages of the product life cycle, and the questions that explore issues that companies face during the development and manufacturing stages of the product life cycle reflect some of the more traditional difficulties faced in these stages rather than the disruptions wrought on the supply chain by the pandemic. This underscores the critical importance of CDMOs in animal health drug development and manufacturing and the companies’ ongoing attempts to evaluate and select effective CDMO partners.
Unsurprisingly, the top-ranking challenge during development was designing an optimal and efficient “time to market” timeline, a traditional development complexity that is only becoming more critical, despite continuous innovations accelerating the path of drugs to market (66%). The other top issues identified were well upstream of the development cycle for individual drugs, including identifying the right products or therapeutic areas for investments (64%), disrupted and unusual future product forecasting (62%), and developing an IP or patent protection strategy (58%).
During manufacturing stages, a diverse set of hurdles was reported as particularly difficult, with tracking compliance of CDMOs with required regulatory standards selected as the most pressing (52%). As always, scaling of manufacturing remains a perpetual struggle, with 48% of respondents identifying scaling up from development or clinical phases to commercial manufacturing and 46% selecting the limited choices of commercial-scale CDMO partners among the more vexing issues at this stage. Other ranking responses revolve around digital and data-related complexities, including addressing IT security threats (48%), establishing robust, data-driven planning and scheduling strategies for manufacturing (46%), and serialization (38%).
Selling drug products to consumers was identified as the least problematic stage of the product lifecycle (6%), and there was little difference among the relative ranking of issues encountered at this stage, including establishing direct-to-consumer/patient/physician channels (92%); establishing a reliable pharmacy benefit manager (PBM), wholesaler, and pharmacy networks (90%); and competing with other, potentially favorable dosage forms (89%), among others.
Subsequent questions explored the solutions that each respondent’s organization is currently implementing or planning to implement within the coming 24 months to address the relevant complexities facing the animal health drug supply chain. Consistent with longer-term trends impacting drug manufacturing across categories, consolidating suppliers was a popular solution, identified as a current solution by 36% of respondents and a solution sought over the next two years by 30%. Thirty-two percent of respondents reported that their organizations are currently developing a sustainable serialization strategy, while 28% reported that they were planning to do so over the next 24 months. Similarly, the adoption of new technology — including the Internet of Things (IoT), analytics, machine learning, and artificial intelligence — is a supply chain solution currently deployed in 30% of respondents’ organizations and planned by 28%.
A different series of questions explored the therapeutic areas addressed by the respondents’ organizations and the considerations that are involved in selecting the optimal dosage form. The therapeutic area targeted by the most organizations was metabolic diseases (38%), followed by pain management (32%), emesis (30%), cardiology (28%), and parasitic, microbial, and fungal infections (each 26%), which aligns well with the overall markets for animal health drug products.
When identifying the most strategic dosage form (on the basis of sales volume) for drug products with multiple formulations, oral solid dose (OSD) led the pack (38%), followed by semi-solids (32%) and injectables (30%). In a breakdown by volume of current products by therapeutic area and dosage form, anti-emetics were the drugs most formulated as OSD and endoparasiticides the least offered as OSD (36%). Antimicrobials were the drug type most typically formulated as semi-solid liquids, creams, ointments, or lotions (43%), while reproduction control drugs were least commonly formulated as semi-solid products. However, reproduction control drugs were the dominant drugs formulated as sterile injectables (43%), with drugs addressing renal failure representing the smallest relative fraction of sterile liquid drug products.
The survey produced an interesting inverse trend in terms of which dosage forms were considered to be the most difficult to develop and manufacture versus which are the most challenging to package, store, and ship. Semi-solids were identified as the most troublesome to develop and manufacture (40%) but the least to package, store, and ship (26%), while injectables were considered the most straightforward of the three to develop and manufacture (26%) but the most difficult to package and transport (44%).
The survey additionally sought to explore the decision drivers determining the selection of the optimal dosage form for products for which multiple formulations are possible. The most important decision driver was on the level of patient (or owner) centricity: ease of administration (20%). Some more manufacturing-centric factors were also considered important, notably access and availability of excipients and raw materials (16%), the regulatory framework (14%), and cost of manufacturing and/or packaging (14%), while the top development challenge — time to market — was not identified as a particularly significant factor driving dosage form selection (6%).
The survey concluded with a number of questions investigating the factors determining the selection of CDMO partners for animal health drug manufacturing and packaging and the methods employed to evaluate CDMOs.
Here we see some of the distinction between decision drivers in CDMO selection for human versus animal health drug products. While similar surveys exploring the human healthcare market have typically identified quality as the most important decision driver and ranked cost relatively far down the list, the animal health experts in this survey selected cost as the most important driver, followed by reliability and technical competence, with quality ranking in fourth place. Among a large list of specific CDMO attributes that factor into the CDMO selection process, therapeutic experience was the most prominent (82%), followed by safe and secure IT infrastructure (80%), access to the CDMO’s C-suite leadership (78%), and geographic convenience (proximity to the CDMO location) (78%).
Following the selection of a CDMO partner, animal health companies need to continue to evaluate a range of performance attributes of their CDMO partners to determine whether the partnership is successful. The most important performance attribute identified in this survey was communication and transparency, which was ranked as “very important” or “somewhat important” by 90% of respondents. The next most important performance attributes were resource management (80%) and billing practices (78%), although a large number of attributes (e.g., account management, responsiveness, compliance and safety audits, and technical competence, among others) also ranked very highly.
In terms of their biggest frustrations with their existing CDMO partners with regard to manufacturing and packaging, a lack of technical know-how and support was most often selected by respondents as among their top five sources of frustration (54%), followed by cost overruns (50%), and a lack of quality (48%) and on-time delivery (46%).
In total, the survey provides insight into the rapid evolution of the animal health market, highlighting ongoing issues in development, manufacturing, and distribution, including certain situations that were worsened by the disruptions and volatility of the pandemic. Raw material sourcing difficulties, disruptions across global markets, and unusual product forecasting complexities remain topics of particular concern. Simultaneously, the respondents from the animal health sector indicate a limited choice of contract outsourcing partners, particularly those with relevant therapeutic experience and technical know-how who are capable of production scale-up and high-volume commercial manufacturing, with cost remaining a primary underlying concern.
Reference
The Animal Health Product Lifecycle: Challenges, Insights, and Needs. Rep. TriRx Pharmaceutical Services. 2022.
Jeremy Tatum has more than 18 years of commercial experience in the pharmaceutical industry. Prior to TriRx, Mr. Tatum served as VP, Commercial and Portfolio for SunGen Pharma, where he managed multiple licensing deals in the United States and abroad. Before SunGen, he ran the global serialization project for Par Pharmaceutical, a project that spanned five manufacturing locations, two distribution centers, and over 30 CMOs. Mr. Tatum grew up working in his family’s independent pharmacies and holds a B.S. degree in marketing from Tennessee Technological University.
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