CPhI Report Analyzes Supply Chain and Contract Services

CPhI Worldwide, part of UBM Live’s Pharmaceutical Portfolio, has released findings of the final part of its 2014 annual report at CPhI Worldwide in Paris. Three experts: Hedley Rees of PharmaFlow, Hendrik Baumann of Arevipharma, and Lukas Utiger of DPx Fine Chemicals and Integrated Offering, have examined the pharma industry providing analysis of supply chain and contract services and how the market will adapt and grow.  
 
According to Hedley Rees, one of the major problems that currently exists within pharmaceutical development is that many biotech’s and virtual companies are simply looking for an exit part way through development, and larger companies are only looking to develop proven products, resulting in a severe ‘commitment dilution’ that is slowing down and hindering innovation.
 
Lukas Utiger has suggested there is currently an imbalance between supply and demand of manufacturing capability, which is resulting in unsustainable price pressure, and Hendrik Baumann warns that increasing price pressures being experienced by API producers worldwide, if not addressed, will result in increasing GMP issues and threaten patient safety. As a result, he argues we are at the start of a split within the contract services sector, which ultimately will lead to European API producers concentrating on flexible delivery across multipurpose plants, with Asian facilities concentrating on single use facilities for low cost commodity type production.
 
In order for the industry to survive we will see increased consolidation and integration of services across larger CDMO players with Utiger predicting increased strategic partnerships between pharma and key CDMO providers. Ultimately, this will result in several CDMOs having more than 10% of drug product and substance market chain in as little as three years.  
 
Outsourcing is also resulting in severe supply chain pressure, according to Hedley Rees, who foresees a continuation of the slow progress that has so far blighted government and regulatory proposals to appropriately tighten the commercial supply chain. Baumann added that this is creating an unfair playing field for API producers, particularly with regard to cGMP, environmental protection and sustainability. Furthermore, as a direct consequence of increasing use of tender business we are likely to see future shortages of popular drugs due to decreased warehouse capacity.
 
Rees has foreseen big pharma reacting to these supply chain issues with increasing scrutiny of CMC packages for potential licensing partners. Ultimately Hedley Rees argues that regulators are not the answer to underlying issues of poor practices within the development supply chain of drugs and the industry will realize that QbD is about engaging with end-users and involving stakeholders that have historically been held at arms length.
 
Finally, Baumann has seen increased innovation entering the market through western contract services development in response to pricing pressures. One innovation that will be crucial in developed markets is the use of microreactors, which allow for seamless scaling-up of processes using parallelization instead of batches.
 
The full findings of the report is available for download at: http://l.cphi.com/annual-report2014