In the last half-century, the two most significant changes in the global pharma sector have been 1 the emergence of a generic medicines industry that fills more than 80% of global prescriptions and 2 the ability of regulators to keep up with science and — in over the last decade — shape the drug approval pathway to reflect policy. We have seen the rise of the approval hurdle for blockbuster me-too drugs that give patients negligible marginal benefits.2 Instead NDA sponsors now can use a number of mechanisms for accelerating the approval of drugs that address unmet medical needs or have mechanisms of action linked to a specific gene possessed by a specific patient population.3
In the same half-century, on the other hand, pharmaceutical manufacturing on the whole changed very little despite valiant efforts by FDA to take the industry into the 21st century. Any changes that did occur involved generally enhancing GMP standards, which have improved steadily across the board in all geographies. Most of this progress can be attributed to the International Conference on Harmonization (ICH) and increased harmonization of standards globally. However, I believe significant change is on the horizon.
In 2014, my article Why Dr. Hamburg Needs Her Dean’s List 4 focused on the inability of regulators to get pharma manufacturers 5 to do more than just comply. FDA currently only gives pharma manufacturing facilities three possible classifications in an inspection: the first is “no action needed,” meaning that manufacturing issues will not be the reason for nonapproval, while the two other inspection outcomes are negative and generally indicate set-backs to an approval are likely.
Today, FDA still provides no feedback when plants do better than comply, and so FDA is unable to send a signal of encouragement for those that want to be role models. FDA’s message has to date been all about meeting its regulations and ICH guidelines. The graph below from the previously mentioned article illustrates the problem and how an FDA Dean’s List could solve it.
Inspections have traditionally paid little attention to quality cultures signals. I even recall a very good, but bruising, inspection 6 in which the message my team and I received was something like “patients want capsules full of compliance.” It has been tough to fight such attitudes, yet I keep telling my people “patients want capsules full of quality,” because if we think quality, then compliance will take care of itself. Quality is what happens when nobody is looking, and it is what makes sure we catch the unexpected. Compliance only deals with what is expected, and is therefore insufficient to truly protect the patient.
FDA started to “walk the talk” on the need for a new manufacturing paradigm in 2002 when it launched its Vision for the 21st Century. Since that time, the agency has pushed forward a number of innovations: Parametric Release of Human and Veterinary Drug Products, Process Analytical Technology (PAT), and Quality by Design (QbD). Interestingly, ICH contributions also moved from product-focused guidelines (impurities, stability…) to “how to do” (ICH Q7 to 11), and currently “how to develop” (ICH Q12).
Quality has thus evolved from focusing on the what (defining the product) to the how (improving how it is produced). To date, the heavy lifting has been performed by the regulator. For the most part, FDA has been behind these innovations, and for this reason it remains the gold standard of regulators. Yet there has been little adoption of these innovations. Except for regulation-driven requirements, e.g., wide adoption of risk-assessment and meeting constantly escalating GMP standards, there has been virtually nil traction in adopting new paradigms, including PAT, QbD, parametric release or continuous manufacturing.
All of these initiatives may be sound ideas, but because the industry generally does not perceive any short-term gain, they are not adopted. The root casuses for this are many: lack of global harmonization and FDA being a poor communicator; furthermore, the drug industry being both very conservative and very profitable: if forced to choose between risk and manufacturing cost reduction, reduced risk is preferred. As a result, many new useful innovations are standing idle because there is no driver to get them adopted.
Last March, FDA gathered industry associations to inform them of changes in its approach to inspections.7 Funding through the Generic Drug User Fee Act (GDUFA) has enabled FDA to dramatically strengthen its compliance oversight. There are now two distinct, independent but overlapping inspection dimensions: a pre-approval inspection (PAI) program and a surveillance program.
In addition, FDA has created a cadre of specialist inspectors (headquarters-based, not district-based) and is implementing the New Inspection Protocol Project (NIPP). The industry has been informed that “... while continuing to document observed deficiencies, [FDA] inspections should also identify practices that exceed basic compliance... the inspection process focuses on measuring and describing the state of quality… industry outreach / training on positive manufacturing behaviors.”
FDA explicitly says that “Elements of an inspection [include] quality culture, maturity of the process development program, lifecycle risk management and oversight.” “[During inspections] Scoring will take place at the element level and for the 6 [quality] systems, 29 Elements were developed… There are six performance levels (1-6): three levels of failure (critical, major, minor), one acceptable level, two levels of exceeding basic compliance.”
Furthermore, FDA says that “... good practices that exceed cGMPs” contribute to quality performance. The agency also indicates that although its initial focus will be on sterile drugs, 8 one should expect this approach to become a generalized best practice of FDA.
Today we have a re-structured industry in which big pharma is no longer leading drug innovation, and the small pharma firms that innovate no longer develop or manufacture in-house. Instead, small pharma companies partner with CDMOs both to generate the knowledge required for the CMC section of new drug applications (NDAs) and use their production capacity to launch new drug products. The business model of the new innovative pharma companies is defined by high risk / high reward, speed to market and maximum returns. The key success factors are knowing what vendors present a good fit with the project and developing strong partnerships.
This model allows CDMOs to take risks and invest in what many consider to be exotic capabilities — capital expenses for out-of-the-ordinary equipment / technologies that solve unique problems and considerable operating expenses for expert individuals that can link the use of sophisticated technology with fundamental understanding of these out-of-theordinary processes.
A specialist CDMO offering a specialist technology can quickly fill its capacity by serving all, even if there are only a very few drug-development projects that require a highly specialized capability. The time when big pharma had everything in house is long gone, primarily because even if you can afford the plant you cannot afford to have the experts on hand waiting just in case a project comes along that requires their specialized skills – and experts will remain state-of-the-art only if they are always busy.
This restructuring of the industry has created a situation in which companies can exploit a vast range of innovative technical opportunities. Soon the key driver for their adoption will be competition. The industry structure is no longer based on captive development and captive manufacture; innovators now rely on specialist CDMOs that have the technical solutions across all scales supported by talented individuals with deep know-how.
These CDMOs tend to be heavy investors in new plant and equipment, actively fund R&D in a narrow number of technologies, and employ armies of highly experienced and dedicated multi-disciplinary teams that have developed strong methodology to support the design and development of robust production processes. These teams tackle a large number of projects; each year they may in fact support a dozen process validation campaigns and supply clinical trial materials for a hundred compounds in every phase of clinical development.
Such CDMOs have a fully industrialized approach to generating the CMC section of NDAs. For them, developing an extensive understanding of the process is not just a “nice to have”, it is a pre-condition for meeting profitability goals. CDMOs make money on a manufacturing profit and loss (P&L) not on a patent; they need to be lean, deliver right-first-time and make sure they operate with high capacity utilization. What has remained mostly an illusive holy grail to the big pharma plants in Puerto Rico and Ireland is a survival pre-condition for today’s CDMOs.
Not surprisingly, these CDMOs totally embrace the Innovation that FDA has been trying to convince industry to adopt for the last 15 years as it makes good business sense.
Why do CDMOs embrace PAT, QbD and Quality Metrics, and why are they delighted with the introduction of Quality Culture into FDA’s jargon and guidance? Because it gives them an opportunity to differentiate in a measurable way.
CDMOs are in the service business, and thier activities only become industrial when all of the problems are solved. So for the most part, what matters is how each CDMO’s employees perform. The company culture of a CDMO has always been very apparent to clients when they visit or conduct audits. In some cases, clients have been heard to say “at XYZ CDMO, the service is uneven, it all depends on who they put on the team for our job, and you only find out when it’s too late” — with the changes taking place at FDA, clients of CDMOs will be able to get a site-specific trended measurement of quality performance made by the ultimate arbiter.
Quality Metrics and the NIPP performance inspection scoring will enable the ranking of sites that will allow objective comparison between those sites that are a good fit for each sponsor’s project. Market pressures will make sure all of this data becomes public, and organizations will make sure it is compiled and made widely available. The differentiation will no longer be just between compliant and non-compliant. Quality Metrics and NIPP will differentiate between bad, OK, good and great.
Furthermore, this data will allow innovators to make better decisions when it comes to selecting CDMOs for their pharma intermediates, APIs and drug products. FDA has indicated that performance ahead of compliance will be rewarded. As a result, manufacturers will finally realize direct benefits of going beyond compliance, for being early adopters of new technology, and for nurturing a fertile quality culture at every one of their sites. With measurable quality, differently rated sites will be able to price their services based on the value they provide to the client. In addition, with public quality rankings — and the ugly side of globalization raising its head in the shape of fake pharmaceuticals — the increasingly well-informed patient will be looking for effective pharmaceuticals made by quality manufacturers. The changes are, in fact, already taking place. For example, a small pharma company that displays many of the innovative attributes described in this article recently announced that it is contracting with a CDMO for continuous tablet manufacturing. 9 Such agreements are evidence of how much the industry has changed. Innovators do not want to manufacture; this activity is now left to specialists. Interestingly, the CDMO chosen to make tablets using a continuous process is not well known for making dosage forms, but rather APIs. Most likely the determining attributes for this vendor selection were based on soft attributes, not hardware, such as a focus on deep science; a fertile quality culture; a demonstrated commitment to client service; a track record of QbD filings; extensive knowledge of automation, PAT and math modeling; and years of demonstrated reliability.
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