PHARMACEUTICALS
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Digitalisation has a part to play here . It can also enable industry to work on common standards and regulatory bodies to harmonise , notably through reciprocal approvals to get therapies to the places they are needed . Particularly with vaccines , Boyd said , it seems perverse that every regulatory body around the world has to review the same data packages .
Bring it back home
Asked what he would like to see regulators do to ‘ bring API manufacturing back ’, Hicks recalled that labour costs and environmental regulations were what drove it out in the first instance . In addition , a lot of API manufacturing was in Puerto Rico because of tax incentives ; when these ended , much of the manufacturing went away too .
“ The real incentive is to innovate in the equipment space , to develop continuous manufacturing that would eliminate some of the labour costs and not just in the US ,” he said . Where bulk products are made cheaply in batch by tried and trusted means , there is currently very little incentive to develop a new process and get it approved . “ No-one ’ s going to invest in new capacities , new equipment or new technologies in the year it ’ s going to take to get regulatory approval for a new process ,” Hicks concluded . There has been talk recently , Arias noted , of more non-profit manufacturing of APIs and drugs . In the US , a group of hospitals has banded together to start making their own drugs that are in short supply , while France has seen
calls for the return of paracetamol manufacture . Might all this cause a dent in the industry ? Hicks , for one , doubted it in the current regulatory framework . “ It takes years to build and qualify a pharmaceutical manufacturing facility ,” he said . “ We may well see more of it in critical life-saving drugs but in the low-cost area there is very little profit anyway .” Schmidinger agreed , saying that we need to look at why outsourcing happened in the first instance . Pressure on states to reduce expenditure was part of this : it is no coincidence that API manufacturing in India and China boomed during the financial crisis in 2008-10 and suppliers simply could not afford to source APIs in Europe because they would lose the tender if they did .
What ’ s the problem ?
Public sector bodies , said Arias , might need to pay higher prices for the security of supply reshoring would bring with it , though Schmidinger noted that the cost of the API is only part of the finished drug . Even , say , a 20 % hike in API costs would not necessarily come through in the price to the consumer . The EMA is already talking of tenders no longer being based just on price . All that said , he added , “ COVID supply chains are quite strong with a few exceptions ”. Reshoring a whole supply chain is a complex and politicised undertaking that cannot be done overnight . “ I don ’ t see it moving back in the next one or two years .” In recent months , several major pharmaceutical companies , including Pfizer , Roche and AstraZeneca , have made pledges to go carbon-neutral or even carbon-negative by 2030 . Perhaps , said Arias , reshoring parts of their manufacturing supply chain would help with this . “ The question is ‘ What is the problem we are trying to solve ?’” Boyd replied . “ Is it ensuring a steady supply of critical medicines in the future ? Is it trying to bring jobs back ? Often the intention does not work out . High-cost ‣
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