Wyeth's vaccine RandD head talks about vaccines past and future

Vaccine Viewpoint: Emilio A. Emini

Emilio A. Emini, Ph.D., joined Wyeth as executive vice president for Vaccine R&D in November 2005, following a stint at the International AIDS Vaccine Initiative and a 20-year career at Merck, where he last served as senior vice president of vaccine and biologics research. We spoke recently about Wyeth's commitment to vaccines and the expanding role of vaccines among major pharma companies.


Emilio Emini: Wyeth has had a very long history in vaccines. If you go back to our previous incarnation as American Home Products, it was an accumulation of a number of companies. So if you trace back the history of the predecessor companies that make up what we now call Wyeth Vaccines, you'll find a number of pathways that led us to where we are.

One of those pathways was a company called Praxis Biologicals, which was incorporated into Lederle Vaccines, which became part of American Cyanamid, which was then purchased by American Home Products, and then became Wyeth. In the 1980s, Praxis Biologicals invented conjugation technology, which permitted development of vaccines that could engender immune responses -- especially in infants -- against bacterial polysaccharide. This ultimately led to the development of Prevnar, the current pneumococcal vaccine.

The most important products historically were the oral polio virus vaccine, which was the main one used to eradicate polio in North America, and the smallpox vaccine that was used in the campaigns during the 1970s. Wyeth Vaccines has also produced vaccines against diphtheria, pertussis and tetanus.

So we have a pretty rich history, when it comes to vaccines.

CP: That's a long pedigree, considering the ebb-and-flow of vaccine makers in North America.

EE: That's true. And many products that Wyeth Vaccines once produced are no longer made by Wyeth. For example, the need to make oral live attenuated polio virus vaccine went away with the virus' elimination in North America. The need for a smallpox vaccine went away for the same reason. So, in the end, I suppose if one is very successful with a vaccine (eliminating the virus over a long period of time), the need for the vaccine would ultimately disappear.

CP: We're seeing a surge of interest in vaccines from major drug companies. What do you think has prompted it?

EE: I think it comes from a recognition of what vaccines can do. No other intervention in human history -- besides clean water -- has had such a profound effect on the quality of human life. What we're seeing in the past decade or two is a recognition of that role.

A significant driver changing the perception of the value of vaccines -- both from a medical and commercial perspective -- was the success of Prevnar, Wyeth's premier vaccine product. It was introduced in the U.S. in 2000, and is now in 80 countries worldwide, and it's been a success medically and commercially. In the countries where it's been introduced, it's largely eliminated the seven different serotypes of penumococcal organisms and the infections they cause.

The value of a vaccine like Prevnar caught everyone's attention. The commercial value follows the medical value.

CP: What role will vaccines play at Wyeth in future?

EE: Oh, they'll have a very important role. The company's dedicated itself to expanding vaccine development.

I joined Wyeth after having spent more than 20 years at Merck. More than half my time there was in vaccines and, at the time I left, I was head of Merck's vaccine research effort. I came here because of Wyeth's desire to expand and focus itself in a very large way on vaccine R&D.

We have a significant portfolio of potential vaccines in our pipeline. The one that we've talked about most is our second-generation Prevnar, which we call Prevnar-13. It goes after six more serotypes of pneumococcal organisms and will also be very useful in targeting the disease in the developing world.

This is a non-trivial effort on our part, as you can imagine. A 13-valent vaccine will be the most complex biological product ever produced.

CP: You mention Prevnar-13 in terms of its status as a biological. How do you differentiate between vaccines and large-molecule therapeutics?

EE: In terms of family relationship, vaccine development is more closely related to how one develops biologics than it is to small-molecule development. But it's still different enough to consider it a distinct entity. If you take a look at the overall Wyeth portfolio, we classify projects among small molecules, biologicals, and vaccines.

While the pathways are different, vaccines still fall into the same developmental timeline: between 10 and 15 years.

CP: Is there a significant difference between prophylactic and therapeutic vaccines?

EE: Not as such. A vaccine elicits an active immune response. So one elicits a response to prevent a disease, and the other elicits one to treat a disease. Historically, most vaccines were intended to treat infectious diseases, so they were prophylactic in nature. But there's been increasing interest in therapeutic vaccines. At Wyeth, we have a very large program aimed at therapeutic agents for Alzheimer's disease. One aspect of that effort is a passive immunization strategy, a monoclonal antibody aimed at a particular molecule that appears to be important in the progression of the disease: the beta-amyloid molecule. This is in collaboration with Elan.

Another aspect of that program is to develop an active vaccine, one that will elicit an antibody that will delay progression of Alzheimer's disease. So the former is a biologic, and the latter is a therapeutic vaccine.

CP: After Prevnar and Prevnar-13, what's on the horizon for Wyeth Vaccines?

EE: The only other one we've talked about publicly is an early-stage program for a vaccine against meningococcal type B. Again, this is a bacterial organism that can cause severe meningococcal disease in infants and adolescents.

As you can see, there's a certain pattern here. If you look at the infectious diseases that require vaccines, a lot of them are bacterial in nature. In many cases, these diseases are very rapidly progressive when they occur, oftentimes before we can intervene with a suitable antibiotic. In addition, for a lot of these bacterial diseases, they're increasingly antibiotic-resistant. So the best way to deal with these infections is not to wait for them to occur, and then begin treatment. The best way to deal with them is to not get them in the first place. And the best way to do that is with a successful vaccine.

Pharmaceutical Sterility Testing

Essential things to know

Sterility testing of pharmaceutical articles is required during the sterilization validation process as well as for routine release testing. USP1 requirements employ sterility testing as an official test to determine suitability of a lot. An understanding of sterility testing is beneficial in terms of designing a validation process. The need to provide adequate and reliable sterility test data is an important quality assurance issue. Sterility testing is a very tedious and artful process that must be performed by trained and qualified laboratory personnel. The investigation of sterility test failures is a process that requires attention to environmental data as well as many other factors including training and sample difficulty.

This paper presents the general concepts and problems associated with sterility testing as well as the various testing methodologies. Most USP <71> sections are harmonized with the EP/JP.

Sterility testing is an essential part of every sterilization validation. Sterility testing is an extremely difficult process that must be designed and executed so as to eliminate false positive results. False positive results are generally due to laboratory contamination from the testing environment or technician error. The testing environment must be designed to meet the requirements of the United States Pharmacopeia (USP) in terms of viable microbial air and surface counts. Growth media used in sterility testing must be meticulously prepared and tested to ensure its ability to support microbial growth. Procedures for sampling, testing, and follow-up must be defined in the validation procedures.

Sampling Plans

The official test, the USP (Volume 30) recommends testing 40 units per production lot. A reprint of Table 2 "Minimum Quantity to be Used for Each Medium2" is on the next page. Some of the quantities are not harmonized with the EP/JP volumes.3

For combination products, the ISO 11137/111354 standards recommend various sterilization validation sampling plans based on lot size and validation method. In cases where small lots (>1000) are manufactured, the sampling size depends on lot size.

Environmental Concerns Related to Sterility Testing

The sterility test environment is described in USP General Informational Chapter <1211>. The environment should be as stringently controlled as an aseptic processing environment. An aseptic processing environment (clean room) is used to dispense sterile pharmaceuticals into presterilized containers. A clean room is generally a room that delivers laminar flow air which has been filtered through microbial retentive High Efficiency Particulate Air (HEPA) filters. The room is maintained under positive pressure and has specifications for room air changes per hour. An environment used for sterility testing should be similar in design to an aseptic processing environment; there should be an anteroom for gowning and a separate area for the actual sterility testing. The testing area should meet ISO Class 5 particulate control requirements (specified in USP chapter (1116)). Sterility testing should not be carried out under a laminar flow hood located within a room that is not maintained as ISO Class 5. Along with particulate testing in the environment, the laboratory must test for viable bacterial and fungal organisms ubiquitous to it. The sterility test technician must be suitably gowned in sterile garments that prevent microbial shedding into the room. The room should be validated in terms of particulate and microbial levels. The laboratory must have a validation and training program for gowning and sterility testing.

Our validation programs require that technicians consecutively test 40 simulated samples for both membrane filtration and direct immersion methods without a false positive test result under less than ideal environmental conditions. Isolator technology is utilized to create a sterile environment for one to test pharmaceutical articles. The validation required to qualify an isolator is extensive. The isolators are generally sterilized using chemical sterilization.

Many issues surround the robustness of the sterilization process. Qualifying and maintaining an isolator system for sterility testing may require extensive work. In testing pharmaceutical articles in a closed system such as Steritest^TM, an isolator may not be the best cost approach to the environmental concerns. Most environmental concerns can be obviated by standard aseptic processing GMP's.5

Methodologies

The United States Pharmacopeia is a compilation of validated methods and official monographs for pharmaceuticals and medical devices. IT is broken down into the following sections: Monographs, General Informational Chapters, and General Requirements. General Informational Chapters <1000> series are not legal requirements. The Sterility Test (USP Section <71>) is categorized under General Requirements and is therefore a legal requirement.

For combination products, the ISO radiation sterilization microbial methods (11737-2 1998)6 describes a sterility test which is a modification for the USP method. This test is specific for the detection of aerobic organisms that have been exposed to sub-lethal sterilization cycles. This ISO sterility test method is recommended for the validation of both gamma and electron beam sterilization processes.

The method of choice for EO7 sterilized products is the official USP <71> procedure.

Processes

Prior to actual sterility testing, it is prudent to send an example sample to the testing laboratory so the laboratory can determine the appropriate testing procedure. Each product should have a unique procedural specification for testing. The procedure should be very specific in terms of which items (or vials/syringes) to test. The procedure must indicate the Sample Item Portion (SIP). The Sample Item Portion is the percentage of the complete product tested. Since medical devices come in all shapes and sizes, it is very difficult to test large and cumbersome medical devices in their entirety. Therefore, the test laboratory will determine a Sample Item Portion which is a portion of the sample expressed in fractional terms (i.e. 0.1 for 10% of the sample).

This number is used in gamma and electron beam dose setting methods. The SIP portion should be validated by sterility testing.

Combination products have unique challenges. A combination product is defined as one that has a drug component with medical device. For example, a drug coated stent. The agency's Office of Combination Products (OCP) would determine which regulatory branch (CDRH, CDER or CBER) is officiating the product. Official USP sterility testing of combination products is required for all sterile drug products. The drug product component applied aseptically creates the largest challenge to laboratory personnel. Biologics must be aseptically processed and cannot be terminally sterilized. In the near future, we will see more biologics that are combination products. Combination products sterilized by radiation are generally handled as medical devices following the ISO 11137 standard. For the most part, pharmaceutical GMPs would take precedent over 820 QSR8 requirements with all combination products. The more robust GMP9 requirement would assure reduced bioburden counts and consistent microbial populations during manufacturing.

The USP <71> Sterility Test contains two qualifying assays which must be performed prior to sterility testing. They are the "Suitability Test" (Growth Promotion Test) and the "Validation Test" (Bacteriostasis and Fungistasis Test).

The Suitability Test is used to confirm that each lot of growth media used in the sterility test procedure will support the growth of fewer than 100 viable microorganisms. If the media cannot support the growth of the indicator organisms, then the test fails. Secondly, a portion of each media lot must be incubated and assessed for sterility according to the incubation parameters (time, temperature) established by the method. If the media is found to be non-sterile, then the test fails.

The Validation Test is used to determine if the test sample will inhibit the growth of microorganisms in the test media. Stasis, in terms of microbiology, is defined as the inability of a microorganism to grow and proliferate in microbiological media. Media that is bacteriostatic does not necessarily kill bacteria; it simply may retard bacterial growth and proliferation. The Validation Test must be performed on each product prior to and/or during sterility testing. This test determines if the media volumes are valid for the particular product. Some medical products contain bacteriostatic and fungistatic compounds that may require special procedures and special media for testing. This test is similar to the Suitability Test described above, however, the product sample is placed in the media along with the microorganisms. Microbial growth in the presence of the test samples is compared to controls without test samples. If microbial growth is present in the sample and control containers, then the test is valid. The next step is to proceed to actual sterility testing. Suitability, validation and sterility tests can be performed simultaneously.

The USP describes three general methods for sterility testing: 1) Membrane Filtration, 2) Direct Transfer (Product Immersion); and 3) Product Flush.

Membrane Filtration Sterility Testing

The Membrane Filtration Sterility Test is the method of choice for pharmaceutical products. It is not the method of choice for medical devices; the FDA may question the rationale behind using the membrane filtration test over the direct transfer test for devices. An appropriate use of this test is for devices that contain a preservative and are bacteriostatic and/or fungistatic under the direct transfer method. With membrane filtration, the concept is that the microorganisms will collect onto the surface of a 0.45 micron pore size filter. This filter is segmented and transferred to appropriate media. The test media are fluid thioglycollate medium (FTM) and soybean casein digest medium (SCDM). FTM is selected based upon its ability to support the growth of anaerobic and aerobic microorganisms. SCDM is selected based upon its ability to support a wide range of aerobic bacteria and fungi (i.e. yeasts and molds). The incubation time is 14 days. Since there are many manipulations required for membrane filtration medical device sterility testing, the propensity for laboratory contamination is high. Therefore, in an open system, more sterility failures are expected when using this method. A closed system is recommended for drugs and small devices or combination products. Most pharmaceutical articles are tested using a closed system. In closed systems, the propensity for extrinsic contamination is very low.

Direct Transfer Sterility Testing

Combination products: This method is the method of choice for medical devices because the device is in direct contact with test media throughout the incubation period. Viable microorganisms that may be in or on a product after faulty/inadequate sterilization have an ideal environment within which to grow and proliferate. This is especially true with damaged microorganisms where the damage is due to a sub-lethal sterilization process. All microorganisms have biological repair mechanisms that can take advantage of environmental conditions conducive to growth. The direct transfer method benefits these damaged microorganisms. The entire product should be immersed in test fluid. With large devices, patient contact areas should be immersed. Large catheters can be syringe filled with test media prior to immersion. Cutting catheter samples to allow for complete immersion is the method of choice.

The USP authors understand that appropriate modifications are required due to the size and shape of the test samples. The method requires that the product be transferred to separate containers of both FTM and SCDM. The product is aseptically cut, or transferred whole, into the media containers. The test article should be completely immersed in the test media. The USP limits the media volume to 2500 ml. After transferring, the samples are incubated for 14 days.

Product Flush Sterility Testing

Combination products: The product flush sterility test is reserved for products that have hollow tubes such as transfusion and infusion assemblies where immersion is impractical and where the fluid pathway is labeled as sterile. This method is easy to perform and requires a modification of the FTM media for small lumen devices. The products are flushed with fluid D and the eluate is membrane filtered and placed into FTM and SCDM. This method is not generally used.

Bulk Drug Products / Biologics and Pharmaceuticals

Bulk Pharmaceuticals (APIs) are tested for sterility per USP 71 prior to release to the manufacturing processes.

Bulk Biologics are tested according to 21 CFR 610.12 for sterility testing. This method requires one media (FTM). The sample test sizes are listed in the document. Volumes are no less than 10 ml.10

Interpretation of Sterility Test Results

The technician must be trained in the method of detecting growth during the incubation period. Growth is determined by viewing the media, which is generally clear and transparent, against a light source. Turbid (cloudy) areas in the media are indicative of microbial growth. Once growth is detected, the suspect vessel is tested to confirm that the turbidity present is due to microorganisms and not due to disintegration of the sample; sometimes samples produce turbidity because of particulate shedding or chemical reactions with the media. Once a suspect container has been tested, it should be returned to the incubator for the remainder of the incubation period. Samples that render the media turbid are transferred on Day 14 of the test and incubated for four days. Growth positive samples require further processing such as identification and storage.

Sterility Test Failure Investigation

For every positive sterility test (OOS), the laboratory should perform an OOS investigation to determine the validity of the positive growth. This investigation encompasses the following items:

1. clean room environmental test (EER) data;
2. media sterilization records;
3. technician training records;
4. the relative difficulty of the test procedure;
5. control data (open and closed media controls);
6. technician sampling data (microbial counts on gloves and/or garments post testing).

The USP allows for a re-test of the product if persuasive evidence exists to show that the cause of the initial sterility failure was induced by the laboratory. Identification and speciation of the isolate(s) is a significant contributing factor to the final decision. If the First Stage sterility test can be invalidated by the laboratory, then the USP allows for Second Stage sterility testing. Second Stage sterility testing requires double the original number of samples tested. The Second Stage test can be repeated if evidence exists invalidating the test due to a laboratory error as above.

A detailed investigation may uncover circumstantial evidence to support a final decision. It is recommended that sterilization cycle data, environmental data, and bioburden data be reviewed prior to making any decision to release product.

It is recommended that medical device manufacturers qualify the test procedure with non-sterile samples.

The probability of a false positive can be calculated using John Lee's formula.11 The formula is based upon sample container diameter, amount of time container is left open and the room particulate count.

Sterility testing requires high levels of control with regards to GMPs, Good Laboratory Practices12, environment (aseptic clean room ISO class 5 or better), and employee practices. It is essential that meticulous technique be employed in the practice of sterility testing. Sterility testing is an integral part of sterilization validation as well as a routine quality control. Generally, false positive results are uncommon in testing drug products using a closed system. Combination products have challenges that should be planned into a robust QA program.

References

1. The United States Pharmacopeia, 30th Revision, The United States Pharmacopeial Convention: 2008
2. USP 30 Table 2 Minimum Quantity to be Used for Each Medium
3. USP 30 Table 3: Minimum Number of Articles to be Tested in Relation to the Number of Articles in the Batch
4. ISO 11137 Sterilization of health care products – Radiation – Part 2 2006: Establishing the sterilization dose
5. FDA Guidelines 2004 "Guidance for Industry Sterile Drug Products by Aseptic Processing, Current Good Manufacturing Practices," September, 2004
6. ISO 11737 ANSI/AAMI/ISO 11737-2 1998 – Sterilization of Medical Devices – Microbiological Methods – Part 2, Tests of Sterility Performed in the Validation of a Sterilization Process
7. ISO 11135 1994 Medical Devices Validation and Routine Control of Ethylene Oxide Sterilization
8. Code of Federal Regulations Title 21/Chapter I/Part 820, "Quality Systems Requirements: General," 2006
9. GMPs CFR 201 Title 21 2006
10. 21 CFR Part 610.12 Bulk Biologics
11. Lee, John Y. "Investigation Sterility Test Failures" Pharmaceutical Technology, February 1990
12. Code of Federal Regulations Title 21/Chapter I/Part 58, "Good Laboratory Practice for Nonclinical Laboratory Studies," 2006

The Role of CMC In Early Trials

Time, quality and budget form the decision matrix

In a intensely competitive environment, pharmaceutical companies from small to large are continuously seeking creative ways of accelerating their development process. Timelines to commence clinical trials are becoming shorter as companies seek definitive results that would prove or disprove their product's potential. With venture capitalists and other investors looking to put money into an industry that is continuously seeking innovative new products and where small to mid-sized pharmaceutical companies compete for their share of the financial pie, the race to show positive clinical results is intense.

Given that clinical trials make up a substantial portion of the overall drug development costs, it is little wonder that companies are intensely focused on ensuring that the trial is designed and developed to as near perfection as possible. Oftentimes, the other half of the project -- the development of the actual product, the Chemistry and Manufacturing Controls (CMC) section of Investigational New Drug applications (INDs) and New Drug Applications (NDAs) -- is not given the same level of attention.

In order to gain a competitive clinical edge, these companies may look to do the most minimal CMC work required while still maintaining an acceptable level of control, as required by the industry. However, the question that arises is whether such decisions truly accelerate the overall development project.

When embarking on the transition from preclinical experimentation to clinical trials (and beyond), it is important that the company truly understand its risk tolerance. Stated alternatively -- how willing is a company to accept the downside of decisions that they make regarding their CMC plan as they navigate through their product development process?

Regardless of clinical indication, every project requires a balance between three key, interrelated factors: time, quality and budget. Compromises made in one or more key areas will depend on what the company would like to achieve at that particular moment in time versus the future; decisions based on how to continue forward in each may have significant immediate and long-term effects, both positive and negative, on the CMC plan and, ultimately, the clinical trial itself.

Time

Regardless of the phase of the clinical trial, critical time is defined by the start date or "first patient in." Typically, these dates are predetermined by the company and may have even been promised to stakeholders. More often than not, actual supply of drug product is an afterthought, since the team planning the clinical trial is rarely involved in the actual product development. This does not mean that the two groups should be working independently of one another. On the contrary, development teams need to be able to supply to the clinical group product(s) that will be used to evaluate the endpoints of the clinical trial in the most appropriate way. To be able to achieve this goal, the development team needs to understand what the clinical team is trying to achieve. In return, the clinical team needs to ensure that their clinical design can be readily translated into a supply of appropriate formulations and packaging configurations by the development team.

Given the amount of work that generally needs to be completed from a CMC perspective, the development plan of the drug product should be, at minimum, nine months to a year ahead of the finalization of the clinical program. Why?

Regulatory Agencies in the U.S., Canada and Europe require in the CMC section of applications and submissions detailed information regarding the active pharmaceutical ingredient (API) and the dosage format in which the API will be administered. For the submission to be accepted, the respective Regulatory Agency must have a degree of confidence in the level of information surrounding the chemistries and production of the API and drug product; with increasing substantiation as the development project progresses.

From an API perspective, for a Phase I clinical trial, information about the characterization and proof of structure, small-scale synthesis process, preliminary testing methodologies and stabilities should be included in the application or submission package. Furthermore, given that at this stage available quantities of API may be small, there needs to be sufficient lead time made available to the API manufacturer to supply sufficient quantities to be used in actual formulation and product manufacture.

Similarly for the drug product, investigative formulations need to be determined by the development team and manufactured for Phase I clinical trials. Preliminary testing methodologies and stabilities need to be assessed and included. For many pharmaceutical companies, such activities may be contracted out to a Contract Manufacturing Organization. Companies utilizing such contractors must realize that unless a CMO is selected and managed with care, the CMC work being performed could be on the critical path of the clinical start date.

Choice of a good CMO is dependent on a number of variables, not the least of which are:

1. strength of scientific teams
2. available technologies
3. available capacity
4. ability to manage multiple clients
5. typical lead times for production, packaging and testing, including time to supply relevant data required for clinical trial application
6. strength of Project Management or Client service department
7. Regulatory Agency inspection status and results
8. competition of quotation
9. strength of quality systems.

Companies should ask for references or speak with colleagues in the industry to gain insight regarding the width of gaps between what a CMO promises and what was actually delivered. A company should not enlist the services of a CMO without performing its own due diligence.

Independent of choice, a company should place a high priority on managing its interaction with the CMO. With competing timelines and resources between itself and other clients in the queues, it is not uncommon -- and, yet, understandable -- that timelines within a CMO can and do slide. Without proper upstream preparation in the CMC strategy and vigilant oversight during execution of CMC-related tasks by the company, such delays at the CMO in the development process will severely impact the timely supply of clinical materials.

Another example of a timing risk stems from product development scientists designing formulations quickly and delaying any further product development until a later date, without correspondingly moving out the clinical start dates. Depending on the development program, the downside to such an approach lies in the risk of proceeding further along the development program without fully understanding the product. For example, a company looking at a combination product for a 505(b)2 submission performs a clinical trial using the two active materials in their current, separate dosage formats. Anticipating favorable results, the company decides that within a year from receiving the results, it would proceed with a next-staged trial with a single dosage format that contains both APIs. However, being risk averse, the decision to commence formulation and development activities is delayed until definitive positive results are obtained. This leaves the company fewer than 12 months to complete the CMC requirements for the drug product.

In a perfect world where all tools and personnel are completely at one's disposal, experimentation can be performed in numerous parallel fashions and results are perfect and errors never occur, such a project could be accomplished. Yet reality (Murphy's Law, to some) relates a different story. Companies begin to push their CMOs. Strongly forged relationships between the two begin to suffer, experiments do not always work exactly as planned and mistakes happen. In a rush to supply product, concessions begin to be made. A "Hail Mary" attitude may begin to creep into the scenario, and experiments that worked once are used as the basis for proceeding ahead full force.

Quality

It is a common misconception that following current Good Manufacturing Practice (cGMP) will cause unnecessary delays in the supply of clinical materials. Increased paperwork and adherence to stricter guidelines during manufacturing, packaging and testing are sometimes seen as impediments in accelerating the delivery of product for a clinical trial, particularly for Phase I clinical materials.

These CMC activities, performed in a cGMP environment, do not in and of themselves ensure that the product will pass for use in a human trial. What such environments do provide, however, are assurances that each element executed has an internal system of checks and balances which would prevent failing product to be released and used in a clinical trial. By definition, a CMO that is cGMP compliant should be in a position to ensure that at minimum

1. their personnel have appropriate educational and experiential backgrounds
2. equipment is installed, operational and fully maintained
3. complete traceability and proper storage of ingredients, packaging components and products
4. production, process, packaging, labeling and laboratory controls are present
5. documentation (from formulation, through production and testing) is complete and has appropriately dated verification steps.

The extent and integrity of a CMO's quality system should be determined through an audit performed by a company or its representative. Weak systems can significantly delay getting finished product to the clinic on time. For example, a product manufactured in equipment that has not been properly maintained which could impact the results obtained during laboratory testing. If a product is formed in an improperly installed blender that has not been maintained properly and, upon testing, aberrant blend uniformity (BU) results are obtained -- is there confidence that the failing BU results are due to the manufacturing process, the formulation, the equipment, or all of these? In such a case, it may be difficult to assess; time would be lost in waiting for the blender to be re-installed and re-qualified, and for experiments to be repeated so that the impact of that particular variable could be determined.

Increased documentation also allows for an easier compilation of a development history that can be traced and understood. Having strongly documented, cGMP-compliant, supportive CMC documentation only leads to greater assurances of control -- something that is viewed favorably by a Regulatory Agency. Knowing up front where the strengths and weaknesses of a CMO's quality system lie will assist in selecting the best contractor for the company.

Budget

Clinical trials comprise a substantial cost of the overall drug development program, from hundreds of thousands of dollars for Phase I studies through tens of millions of dollars for later-phase trials. Companies, for the most part, have an acute understanding and a willingness to spend such monies. However, when it comes to the execution of CMC-related activities, many companies begin to select activities that they feel will give them the bare minimum of information required for a clinical trial application. Such decisions are often made with the desire to defer any work that has substantial costs associated with it to a time when a partnership can be formed or additional funds can be procured from investors (generally after a successful clinical trial).

Investors or potential partners of today are more sophisticated than ever before. With the increasing number of issues surrounding blockbuster products over the past decade, deeper levels of confidence in both the CMC and the clinical trial results are required. Activities delayed due to cost, and therefore not available for scrutiny by investors, may delay a potential investment or partnership.

As with the factors of "time" and "quality," money-based decisions have a direct bearing on what can be achieved. Prudent financial officers and controllers will try to balance their budgets, although they may not fully comprehend the ramifications of certain activities. How many times have development scientists needed to explain the rationale behind making a batch to meet equipment capacity, rather than the 1,000 tablets that are required for the clinical trial?

Furthermore, finance departments may be hesitant to release funds for work that could arguably be postponed until later, again impacting the CMC activities that need to be accomplished.

Given the direct impact that CMC has on the overall clinical trial, it is imperative that companies begin to develop and integrate their CMC strategies as early in the development process as possible. To develop the best and most acceptable path is to gain an understanding and appreciation within the organization as to what it is willing to accept. The implications of such decisions -- as seen through the interaction of time, quality and budget -- can mitigate any risk a company needs to manage during a clinical project.

If 'quality' is the uncompromising factor for a company, there needs to be an understanding that the time to execute CMC tasks may take longer and that performing such activities in a cGMP environment may cost more. If 'time' is key, then the company itself may need to be willing to accept, certain quality responsibilities and their consequences from the CMO. The company may also need to pay additional funds to the CMO to accelerate their development process for additional staffing requirements and overtime. Finally, if 'budget' is the primary driver, then the organization may need to accept that CMC information for its applications and submissions may take longer to obtain. A CMO that is providing their services at a reduced cost may not have the integrity in its quality systems that would allow for confidence in Regulatory compliance

Supply Chain Dynamics

Cutting-edge systems strengthen the pharma production supply chain

The pharmaceutical industry is a $500 billion global business that requires the tightest, safest, and most efficient supply chain possible, to produce the highest quality drugs on time for distribution wherever they are needed. Modern pharmaceutical products rely on ingredients and material from across the globe. Supply chains can quickly become hopelessly entangled if they are not properly established and organized, set up for maximum efficiency, tracked, and logistically sound.

An analysis of how that can best be accomplished must begin with a look at the requirements of the drug manufacturing process itself, and how the supply chain has traditionally served that process. The inescapable conclusion is that traditional supply methods are no longer adequate for the industry to meet competitive needs and regulatory requirements. Online technology offers the necessary solution -- but only if that technology is properly structured to meet pharma manufacturing's needs.

Production Old and New

Pharmaceutical production was born in the pharmacy. Until the start of the Second World War, pharmacists were still mixing powders and vials, and making tablets in their own pharmacies for delivery to customers. As drug production became a factory process, much of the equipment and supply infrastructure developed was merely an expanded version of what had served pharmacies. For example, the equipment for mixing chemicals at primary manufacturing sites was simply a larger version of the small v-shaped mixers once used in the pharmacy for the same purpose.

Today's manufacturing needs are far more complex. Guidelines established by the FDA and other regulatory agencies for cGMP (current Good Manufacturing Practice) in the production of pharmaceuticals include requirements as they affect raw materials, in-process goods, packaging, labeling and finished goods as well as the manufacturing, testing, documentation and product release processes. The production of pharmaceutical products requires validating for the FDA every aspect of the receiving, analysis, storage and handling of drug actives, excipients and other raw materials. And ensuring cGMP compliance to those standards must be integrated with the normal considerations between supplier and manufacturer. These include demand forecasting, stock levels, production plans, maximum and minimum inventory levels, reorder points and order quantities.

Supply Chain Requirements

The supply chain needs for pharmaceutical manufacturing are thus both complex and delicate. A standard supply chain helps take raw materials and turn them into finished products by linking together nodes of production and shipping goods in the most efficient way possible to bring materials from the supplier to the manufacturer. A pharmaceutical supply chain goes beyond that to require total quality in handling and care.

Pharmaceutical companies simply cannot rely on supply sources that use antiquated methods of shipment. For example, it is unacceptable for chemicals or excipients to expire before the manufacturing process takes place, because their shipment was delayed or they were not shipped with proper temperature and humidity control. Additionally, every state has its own license requirements and timetables for what can come in or out of the pharma production plant, and when this must happen. License requirements and special storage needs present one of the greatest challenges for both suppliers and third-party logistics partners assigned to build and implement supply chains strong enough to withstand the hardest knocks and unexpected events.

Worst-Case Scenarios

Given the global sourcing of most drug manufacturers, an inefficient supply chain can create unnecessary storage and demurrage charges at ship terminals and airports, caused by information snags, missing or ill prepared shipping documents, and inappropriate cargo routing. The resulting cost penalties can dramatically add to the already high price of pharmaceutical products by creating huge and unexpected hidden costs. Poor quality of materials and inadequate packaging can lead to wholesale product destruction, and poor or incomplete documents can result in delayed shipments. Such messiness when it comes to vendor responsibilities can lead to goods being rejected out of hand during border crossings, customs delays, cargo loss, and outright theft -- all of which cost money. Switching cargo to airfreight or expedited airfreight services as a last-ditch effort to solve the problem of incompetence and poor preparation may avert total disaster, but only at a steep price.

Not understanding the marketplace can also have dramatic repercussions at every stage of the building the supply chain. Those pharmaceutical manufacturers purchasing from overseas suppliers must coordinate closely with those responsible for shipping the goods to ensure they are intimately familiar with the customs rules and regulations of every country through which freight will pass, in addition to understanding the associated service parameters and costs. A lack of understanding about the freight marketplace can prohibit the import of vendor shipments or -- more likely -- add unanticipated customs costs, and possible exam fees. Additionally, a company can incur unanticipated freight costs or surcharges as a result of improper or inefficient routing of cargo.

Missed deadlines, launches, production runs, and promotions can destroy a company's reputation and cause untold chaos for vendors who must explain to customers that the system has all gone wrong, perhaps causing them to lose business forever. Information control is king when it comes to creating a supply chain that self-cleans: correct information can eliminate calling backwards and forwards from a supply chain node, chasing suppliers, forwarders, shipping lines and truckers, and generally spending hours in a day making sure that the whole line is informed about delays or problems.

Mission-Critical Factors

The fundamental need for quality and performance in the drug manufacturing supply chain centers on creating a process for identifying best practices in transportation, stocking, and quality of compliance (particularly temperature and humidity controls), so that suppliers and shippers understand what is expected of them. This also includes installing processes for computation of cross-border tariffs, and excise taxes, as well as for compliance with regulatory and licensing requirements.

Even a supply chain that seems like it is running well could be crippled by a storm or a political disruption in an offshore supplier. A pharmaceutical manufacturer must always know the status of mission critical factors in its supply chain, even as it leaves the nuts and bolts of freight management to outside interests. That means knowing what has been shipped, what is in transit, what is due to be shipped, where freight is in the cycle, and how the shipment is performing against the stated timetable.

A lack of information is the most preventable, and most costly, problem when it comes to shipping freight. This lack of information can refer to incomplete or missing data about the status of shipments, an inability to retrieve data when needed, or an inability to adequately integrate systems. This can cause a colossal amount of wasted time and energy spent chasing information which ought to be readily available, and lead to a systemic inability to identify and correct problems.

For this reason, electronic tracking protocols are more important then ever when it comes to the pharmaceutical supply chain. When a company knows where its goods are and why they are there, it adds much needed transparency to a process that can quickly become opaque and convoluted, as materials and packaging shuttle back and forth among multi-tiered markets. This is particularly the case where the temptation toward misconduct and fraud, created by the rising prices of drugs at the consumer end, too often produces delayed or "missing" shipments.

Comprehensive Solution

Cutting-edge electronic systems for ensuring that supplies are delivered on time and with proper quality require that the freight forwarding agency have a comprehensive electronic tracking protocol. This means that a company is able to track freight as it moves across the world, reducing the pressure on the drug manufacturer's traffic department, and improving both efficiency and cost effectiveness.

The ideal program will show what has been shipped, what is in transit, what is due to be shipped, where goods are in the cycle, and how the shipment is performing against the manufacturer's timetable. Via links to the freight shipper's own information, customers should be able to cross-check and validate progress and timings of shipments. The entire system should be password-protected, and encrypted for added security. Finally, the system should be interactive, allowing the customer to authorize and initiate both the original transaction and any subsequent amendments, with the system providing written confirmation of such authorization.

The system will also:

• Alert manufacturers automatically that certain key milestones have occurred, such as loading, sailing, arrival, and delivery -- and also warn about exceptions that are causing delays
• Transmit specific customized reports via email at certain convenient times and intervals according to a manufacturer's request.
• Provide online and real time updates on where a shipment is and what it consists of, right down to individual item descriptions, quantities, and SKU codes.
• Enable users to employ "real world" search criteria such as vendor or consignee identities, country of origin, and destination.
• Work with and display both estimated and actual departure and arrival dates.

Controlling the Future

By using electronic tracking systems to thoroughly check every link of a supply chain and make sure it holds, a company can save colossal amounts of time, energy, and resources, and eliminate the high, hidden cost of inefficiency. With such a mechanism in place, a pharmaceutical manufacturer will be able to test its supply links, make sure each one is doing what it is supposed to do, and will continue to hold as long as necessary. Electronic tracking is also a tremendous advantage that helps ensure both regulatory compliance and marketplace flexibility. In today's era of biologics, increased orphan drug support, and genetic medicine, customized production requirements are the rule. The future of drug manufacturing rests in the hands of those who are able to employ supply solutions that support production tailored to meet the specific needs of distributors, retailers and consumers

Paradigm Change in Bio-Manufacturing

Technology is transforming manufacturing options

Biopharmaceutical manufacturing is undergoing a major paradigm change from unique, highly specialized processing of individual products to uniform systematic processing that applies to a multitude of products. This transformational technology increases the number of new biopharmaceutical entities that can be produced in a single facility, increases the efficiency of capital and fixed asset utilization, and increases the utility of multi-product, multi-user manufacturing facilities. In this environment, contract manufacturing of biopharmaceuticals promises to open the pipeline for new biopharmaceuticals, reduce the cost of manufacturing to the innovator and increase the availability of new and more varied products to health care providers and patients.

Traditional biologicals include vaccines and blood-derived protein products such as albumin, Factor VIII and VIX, and immunoglobulins. These products were hard to purify and characterize by techniques available when they were developed, susceptible to unknown contaminations from source materials, and had relatively unusual and specific processing technologies with uncertain effects on product quality. Regulatory agencies relied on the documentation of processing controls in addition to QC test outcomes for assurance of the consistency of product quality, and operated on the basis that the process defined the product. In this paradigm, the manufacture of a given product was precisely facility and process dependent. The concept that "the product is the process," while unproven, was heavily relied upon and virtually precluded changing processing technologies or facilities, or using contract manufacturing in multi-use facilities.

Biologicals produced by biotechnology include recombinant proteins and monoclonal antibodies that are understood at a high level of molecular detail. Current bioprocessing techniques include well-understood and highly specific purification steps. Analytical techniques now give a full molecular characterization of the product and show details of batch-to-batch variations allowing root-cause assignments to manufacturing variations. With tested and released cell lines grown on highly characterized animal-byproduct-free growth media, manufacturing lots of well characterized biologics are now highly reproducible. Methods are available that demonstrate the bioequivalence of biopharmaceuticals before and after process improvements or site-to-site transfers. Analytical characterization, combined with bioequivalency studies, have proven repeatedly that bioprocessing has reached a stage of maturity dominated by scientific approaches to product consistency that prove the equivalency of product made in different locations by slightly different processes, leading to regulatory acceptance of the use of CMOs for biopharmaceutical manufacturing (Faden, 2005).

There are more than 125 biopharmaceuticals currently licensed, and in 2006 there were more than 400 in development (PhRMA, 2006). While estimates vary, growth in new biopharmaceutical entities (NBEs) will be approximately 20% annually during the next decade, with an estimated market value of $18 billion by 2010. With this explosive growth comes the need for significantly increased manufacturing capacity. The number of products is large and the total amount of protein API required is large, but the amount required for each product is neither large nor easily predicted. There is uncertainty of outcome for each product until completion of clinical trials:

• clinical success or failure is uncertain until completion of trials,
• dose levels and target patient populations are uncertain until proof of efficacy, and
• quantities required for market satisfaction cannot be estimated until the last stages of product development.

It is therefore difficult for a company to accurately evaluate and decide on capital investments for manufacturing a new unproven product in time to be ready for the projected launch date. This uncertainty opens opportunities for contract manufacturing of biopharmaceuticals to reduce risk and increase supply flexibility for the product originator.

Worldwide capacity for the production of protein biopharmaceutical APIs from mammalian cell culture was estimated to be about 2 million liters in 2006, with approximately another 1 million liters in construction planning and start-up phases (Seymour, et al., 2006). The split between product originators and CMOs is about 85% to 15%, but there are indications that the proportion of CMO-based manufacturing is increasing (Miller, 2008). The physical requirement for biopharmaceutical therapeutics is expected to more than double over the next decade, requiring a doubling of production capacity for the industry as a whole, and raising ‘make-vs-buy' decisions for all product originators. Most of these originators are either involved in or are considering outsourcing of new biopharmaceutical products to enhance profitability and to focus on core competencies (Contract Pharma, 2007).

Two seemingly opposing trends are driving the shift to CMO-based biopharmaceutical manufacturing: One is the convergence of production technologies and the other is market fragmentation. The first therapeutic monoclonal product to be produced was OKT3™, an anti-transplant-rejection mouse antibody produced as ascites, which was licensed in 1986. Today more than 20 monoclonal-based biopharmaceuticals (MAbs) have been licensed, the number is growing rapidly, and they are almost exclusively humanized antibodies that are manufactured by mammalian cell cultivation in large-scale bioreactors (Jones, et al., 2007).

Fully humanized antibodies are now mass-produced in large cell-culture bioreactors in quantities of 5-10 kilograms per 10 - 20,000 liter batch, and some protein biopharmaceutical products are manufactured in quantities in the range of 100 – 1000 kg/year. Since monoclonal technology was developed, there have been major advances in cell line development, bioreactor construction and operation, purification strategies and analytics. Manufacturing monoclonals now follows a regular sequence of unit operations, largely independent of the epitope specificity of the monoclonal. Today, the technological convergence to a ‘one-plant-fits-all' approach to biopharmaceutical manufacturing is a practical realization.

Manufacturing with recombinant CHO and other cells as a common platform for monoclonal antibody (mAb) production has converged cell-culture processes and allowed cultivation at levels of approximately 10 million cells/ml in total volumes as large as 20,000 liters, levels that few imagined would be possible 20 years ago. The use of standardized purification schemes with Protein A capture, ion-exchange, hydrophobic interaction and cross-flow concentration and diafiltration has made it possible to use one set of hardware, with adjustable parameters and exchangeable resins or filters, for most monoclonal and related products. There have been detailed analyses of this convergence of processing technology that indicate further convergence, uniformity and cost reduction is possible (Sommerfeld, et al., 2005), especially if manufacturability in a uniform system is an objective of process development (Gerson, et al., 2005).

Market fragmentation is driven by both the existence of large sales-volume products for many major indications, and the identification of niche indications by increasingly sophisticated genetic and analytical techniques. Of 16 therapeutic categories, cancer represents 45% of the new products, infectious diseases represent about 15%, and the remaining 14 categories each represent less than 10% of the potential products, as seen in Figure 1 (PhRMA, 2006). A few target indications with large numbers of patients -- rheumatoid arthritis for example -- have already been dealt with by a number of biopharmaceuticals, and there is significant competition for market share. To further expand product lines, companies are focusing on smaller markets and more specific indications, with the clear implication that large manufacturing capacities for a single product will not be required and that contract multi-product facilities will be increasingly used for biopharmaceutical API production, in much the same way as contract sterile filling and packaging facilities are frequently used today.

Figure 1: Monoclonal Products in Development 2006

To meet reasonable expectations of financial return, the cost of developing, licensing, manufacturing and launching new biopharmaceutical entities, NBEs, must be trimmed to balance against the lower expected financial returns and higher uncertainties of lower volume niche products. DiMasi et al., (2003) have analyzed the economics of new drug development and concluded that in 2003 the capitalized cost of an NCE was about $800 million, and that this cost was growing at a rate of >7% above inflation, or will be an estimated $1.1 billion for each new drug by 2008. Little of the capitalized cost is significantly related to potential market size or therapeutic potential; it costs the same to license and launch a biopharmaceutical with low or high market potential.

A comparison of the hypothetical pre-launch build-vs-buy costs to the product originator is given in Table 1, exploring whether the originator builds, starts-up and validates a new biopharmaceutical facility or goes with an existing CMO for the same product. Costs for a new facility include new staff, training, qualification, validation, and related costs to the time of beneficial occupation. Case-by-case differences in the actual numbers will depend on the location and complexity of the facility, however, the major effect is determined by the cost difference between building a single-user facility for the product originator compared to the fee-for-service use of a multi-user facility. Offshore CMOs offer additional benefits related to reduced personnel costs, contributing to the need for manufacturing cost and cost-to-consumer reduction (Finnegan, et al., 2006).

Significant reductions in the overall capitalized cost can come from the use of a CMO for manufacturing both clinical and licensed commercial materials; the use of an existing and fully operational CMO facility reduces both direct capital expenditures and the time from project inception to launch. Reduced capitalization and shorter times to market improve the rates of return on investments and, most importantly, improve the flow of new biopharmaceutical products to the patients who need them. Once the capital cost is paid down, however, the originator must also be able to realize benefits and cost reductions in the form of reduced operational costs and complexities. The CMO must therefore provide more cost-effective operations than the originator could reasonably provide at their own facilities, and must also provide a level of service that significantly reduces operational complexity for the originator. For example, the CMO must provide high operational effectiveness, a full spectrum of laboratory testing capabilities, and a very high level of regulatory compliance in order to relieve the originator of all concerns related to product supply. The concentration of manufacturing expertise in the CMO should allow this level of service, allowing the originator to focus on product development and marketing.

Investing in new drug development is highly risky as a result of uncertainties in drug target determination and side-effect prediction, both biological factors that are very difficult to overcome. In addition to the uncertainties of biology, the development process contributes additional risk by the uncertainties of scale-up, facility design and construction, quality system implementation and the regulatory evaluation and inspection process.

Table 1: Pre-Launch Cost Comparison for Manufacturing by Originator or CMO Costs ($ Millions) For Product Originator Product Originator Manufacturing CMO Manufacturing Facility 400 0 Product + Operational 400 400 Total 800 400 Capital Retention by Originator 400 Table 1. Hypothetical Pre-Launch Costs if the Product Originator builds, starts-up and validates a new biopharmaceutical facility compared to the use of an existing CMO for the same product. Costs for a new facility include new staff, training, qualification, validation, and related costs to the time of beneficial occupation. Case-by-case differences in the actual numbers will exist depending on the location and complexity of the facility, however, the major effect is determined by the cost difference between building a single-user facility vs. using a multi-user facility on a fee-for-service basis.

In the traditional scenario, a company is involved in taking the NBE though Phase II and III clinical trials while it is also designing, building, validating and starting-up a new facility, and preparing for and going through a pre-approval inspection. Taken together, these activities can stress organizations to their financial and personnel limits, often with negative outcomes in one area or another. By utilizing a CMO for the production of both clinical materials and final marketed product, the originator of a NBE can greatly reduce its risk level, capital expenditure and organizational stress.

The most direct risk reduction is capital savings of nominally $400 million that is not spent on facilities, plus the operational savings that would have been spent on either engineering and construction support or personnel costs for facility validation and start-up. By using a facility already owned and operated by a CMO, only those costs directly associated with product manufacturing are borne by the originator. Secondary risk reductions involve simply reducing the number of things that can go wrong: start-up failures resulting from new and relatively inexperienced staff, technology transfer failures due to scale-up or equipment or facility-related difficulties, assay validation or implementation failures, and pre-approval inspection issues causing delays in licensure, all combining to exacerbate uncertainty. At an experienced CMO and a facility already licensed for manufacturing other biological products, the staff have performed many tech transfers into the same facility and know what works and what does not. Equipment and facilities tend to have been tuned to perfection, and quality and regulatory teams are experienced in showing their facility to regulators, all combining to make a picture of success.

Additional benefits and opportunities arise from the capital-sparing effects of CMO-based manufacturing. The usual approach of product originators is to license a product in one's home country first, and with often a delay of several years, license it in similar markets -- the EU or the U.S. as the case may be -- then obtain licenses some years later in other countries further from the corporate base. Generic companies, on the other hand, usually attempt to obtain as many licenses in as many countries as possible, as quickly as possible, in an attempt to cover the global market and obtain effective market dominance by rapid global market penetration. The current pharmaceutical market is characterized by short product lifetimes due to the combined effects of long product development periods and rapid technological advancement (Pisano, 1997 and Grabowski, et al., 2002). It is therefore very important to generate as much profit as possible in the early years of the product's lifecycle, because later profits may not be realized either as a result of competitive product introductions or unforeseen product side-effects that may reduce indications or marketability. Investment of a portion of the funds that were not used for the construction of a manufacturing facility into product development activities such as expanded clinical studies or other support for additional indications or international filings would provide greater benefit to the originator than would a product-specific manufacturing facility.

From the perspective of long-term planning, there are multiple opportunities for directed investment into aspects of product and process development that would optimize the gains over the shortened product lifecycles prevalent in today's pharmaceutical market. Long-term arrangements between originators and CMOs allow targeting process development for a particular facility, reducing uncertainties and increasing the speed of the development process. Early-stage planning for increased indications or multiple registrations utilizes some of the funds spared by CMO-based manufacturing, but increases revenues early in the product lifecycle. Use of experienced manufacturing teams with long-term experience in biopharmaceutical production, and in locations with lower labor costs, can significantly reduce the cost of goods from the beginning, increasing initial revenues and prolonging profitability as price pressures mount late in the product lifecycle. Integrated over the entire product lifetime, these effects can result in extra profits of a magnitude that could support the development of another new product.

Biopharmaceuticals are contributing increasingly to the pharmaceutical industry, and can contribute substantially to the improvement of human health worldwide, but at present they are very costly. The maturation and relative saturation of the pharmaceutical market, the need for price competitiveness, and more rapid new product introductions, has led to need for speed in product development and efficient manufacturing. The paradigm change in the manufacturing of biologicals and biopharmaceuticals, from unique to generally applicable processes, and from ill-defined to highly characterized products, has in turn allowed regulatory agencies to accept the use of multi-product, CMO-based manufacturers.

The combined effect of this paradigm change is to present the industry with an opportunity to increase product revenues and the speed of new product introductions while decreasing healthcare costs. The new paradigm benefits the originator, the producer, the regulator, the health care system, and
the patient.

---

References

Faden, M., "Biogenerics hang at the starting gate", Pharmaceutical Business Strategies, March 2005.

PhRMA, "Medicines in Development: Biotechnology", 2006.

Seymour, P.M., Levine, H. L., and Jones, S. D., "Successful CMO Selection", BioProcess International, p. 26, Sept., 2006.

Contract Pharma, "Contract Pharma Outsourcing Survey", May (2007).

Miller, J., "Old Model in New Clothes", PharmTech, 8 Feb 2008.

Sommerfeld, S., and Strube, J., "Challenges in Biotechnology Production", Chem. Eng. Proc. 44: 1123-1137 (2005).

DiMasi, J. A., Hansen, R. W., and Grabowski, H. G., "The Price of Innovation", J. Health Econ. 22: 151-185 (2003).

Jones, S. D., Castillo, F. J. and Levine, H. L., "Advances In The Development Of Therapeutic Monoclonal Antibodies", BioPharm International, 96-114, October (2007).

Gerson, D. F. and Mukherjee, B., "Manufacturing Process Development for High-Volume, Low-Cost Vaccines", BioProcess International (4):42-48 (2005).

Finnegan, S. and Pinto, K., "Offshoring: The Globalization of Outsourced Bioprocessing", Bioprocess International, Sept. (2006).

Pisano, G. P., "The Development Factory", Harvard Business School Press, Boston (1997).

Grabowski, H., Vernon, J., and DiMasi, J., "Returns on Research and Development for 1990s New Drug Introductions," Pharmacoeconomics 20: suppl. 3, 11-29 (December, 2002).

Outsourcing Cytotoxics andHighly Potent Parenterals

Drug makers pursuing the clinical development of novel cancer therapeutics — as well as of high-potency prostaglandins, opiates and hormones — are finding they must balance the therapeutic promise of these agents with new fiscal challenges.

Photo courtesy of Baxter Healthcare Corp.

The cancer drug pipeline in particular is bursting with hundreds of new therapeutic entities,1 many of them molecular-targeted therapeutics that use a greater understanding of the genetic basis of cancer to block the growth and spread of malignancy with greater precision than do current chemotherapeutic mainstays.2 These highly potent molecules promise to dramatically change cancer treatment: industry analysts predict that, in the next five to 10 years, most oncology patients will receive drugs designed to attack specific tumors.1

At the same time, companies are facing vastly different economic landscapes than did makers of “blockbuster” chemotherapy drugs that broadly suppress cell division and are used for multiple tumor types. For large pharmaceutical companies and smaller drug operations alike, marketing these niche molecules could mean narrower profit.

Consequently, companies are considering new approaches to the production of molecular-targeted cytotoxic drugs in order to balance sales from smaller patient populations with the cost of complex manufacturing processes, significant safety precautions, and stringent regulatory requirements.

Economics of Outsourcing

Our company estimates that about 60% of investigational cytotoxics will be outsourced to contract manufacturing organizations (CMOs), compared with just 30% of non-cytotoxic products. A number of factors are behind this trend, including the costs associated with building and maintaining high-potency molecule containment facilities, the potential market size for these agents, and the economic risks associated with cytotoxic drug development.

1: Complex Manufacturing Operations

Many pipeline cancer drugs will be produced in parenteral formulations, which require specially designed containment systems in order to assure the safety of the manufacturing facility’s employees and mitigate risks that high-potency pharmaceutical ingredients pose to operators and the general environment.

As a consequence, the capital investment required for the infrastructure to safely produce these high-potency molecules in injectable formulations exceeds that for other parenteral drugs and is a significant financial barrier for many companies.

Multiple validated processes are necessary for the production of all parenteral products, regardless of whether or not they are highly potent, to ensure the highest levels of purity, quality and safety throughout the fill/finish processes. Parenteral cytotoxic agents are among the most highly sensitive drugs to handle and produce, because long-term exposure to even trace amounts of cytotoxics has the potential to cause cancer or mutagenesis.

When cytotoxics are dispensed as liquids or powders, it is possible to generate dust or aerosols containing minute particles that, although not visible, can be inhaled and absorbed through the lung, ingested, or absorbed via the skin or mucosal membranes. Consequently, strict separation protocols have to be in place, with special air-handling and water systems, waste treatment and barrier isolators to protect workers and prevent cross-contamination of other products or product classes.

Manufacturing safety requirements for high-potency parenteral drugs are trending toward a product separation standard that is similar to what is required for the manufacture of penicillin-based products. Current good manufacturing practices (cGMP) stipulated by the FDA for penicillin products requires their isolation from non-penicillin products during processing, either by locating the operation in a separate building or installing a separate “building within a building” for the production process.3

For the FDA, separation means more than just walls. Every aspect of the operation must be distinct, including air-handling systems and processing equipment. Personnel and equipment from the penicillin operation cannot enter the non-penicillin portion of the facility, and the entire separation process has to be audited, validated, and monitored.3

Cost of the infrastructure required to meet such stringent safety rules for cytotoxics is leading many smaller pharmaceutical companies — and those just entering the oncology market — to outsource manufacturing, a move that allows them to devote more of their limited financial resources to their core competencies. At the same time, some established pharmaceutical companies are eschewing in-house manufacturing facilities because of the difficulty in keeping pace with increasing regulatory requirements for risk mitigation in manufacturing and waste disposal.

2: Limited Return on Investment

Even for companies with the technical expertise to produce parenteral cytotoxics in-house, a second barrier to constructing a dedicated manufacturing facility is the potential return a company is likely to earn on its initial capital investment.

Novel cancer drugs are being tailored more finely to specific tumors or tumor types and are likely to be approved for narrow indications with distinct patient populations. Conse-quently, production batches for these niche products will be much smaller than those for traditional chemotherapeutic drugs, and higher per-unit prices are not always a viable strategy for recouping costs. Most regulatory authorities around the globe exert some control over drug prices. Although the FDA does not, and premium pricing for molecular-targeted cancer drugs has been observed in the U.S.,1 increased competition within particular categories and pressure from third-party payers may limit such pricing in the future.

3: Risk of Getting to Market

A third reason companies shy away from constructing their own facilities is the risk they face simply in getting their products to market. Only about 8% of cancer drugs make it through clinical development and regulatory review,4 with approximately half of all research failures occurring during Phase II clinical trials.5

The risk of tying up capital in a manufacturing plant while a product is in clinical trials was demonstrated clearly in the 1990s, during the emergence of the biotechnology industry, when small companies were simultaneously developing complicated therapeutics and building new manufacturing plants. A perfect example is Synergen, a biotech company in Boulder, CO, that in July 1994 had a sepsis drug in Phase III trials, a completed manufacturing plant, and $111 million in venture capital.6,7 When an interim analysis of Phase III data showed a lack of efficacy for sepsis, the financial blow was too much for Synergen to handle. By December 1994, it had agreed to be acquired by Amgen, which now markets the molecule for the treatment of rheumatoid arthritis as Anakinra.

Making the Right Choice

Even if the decision to outsource is clear, the choice of a CMO partner can be a make-or-break move for many pharmaceutical companies. A CMO’s record of compliance with global regulatory and safety standards, and its experience and capacity for producing cytotoxics, are good indicators of whether the CMO will be able to bring a molecule to market expeditiously and maintain supply of the therapeutic over time. It’s critical, therefore, for clients to assess the CMO’s infrastructure and global experience.

1. Infrastructure

The sensitive nature of cytotoxics requires a facility designed specifically for high-potency molecules and staffed by technicians with the expertise to handle the assignment. In general, the facility has to feature flexible containment systems to handle multiple assignments safely, effectively, and reliably. When touring a CMO’s facilities, the pharmaceutical company should examine the facility’s design, equipment, safety processes, and personnel.

Dedicated Production Facility: Choosing a facility designed specifically for high-potency production and validated to meet regulatory requirements around the globe will help accelerate a cytotoxic product’s move toward commercialization. Monitoring systems should be in place throughout the facility to safeguard the product’s quality while meeting stringent safety requirements and standards for quality control.

Fully Integrated Production: Automated manufacturing equipment that is fully integrated throughout production suites reduces the likelihood for any variability in the production process, accelerates turn-around times, and increases the batch yield.

Containment: Quality containment systems (e.g. isolators, RABS, etc.) must form a reliable barrier between technicians or operators and toxic substances to ensure their safety and minimize any risk of contamination. State-of-the-art containment enables closed-system manufacturing and helps to ensure products are produced under precisely controlled temperature, relative humidity, and pressure conditions, while in a clean-room Class 100 environment.

Lyophilizers: Lyophilization chambers for freeze-drying cancer therapies should optimize product quality, maintain the integrity of the molecule, and comply with standards for employee and environmental safety. Look for technologies that minimize risk for human contamination and eliminate variability in the manufacturing process. Systems featuring mobile transfer carts, constant level loading and unloading, and computer-controlled in-process quality analysis technologies are considered to be state-of-the-art.

Vial Decontamination: Health care providers want the assurance that vials containing chemotherapeutic drugs are free of any external cytotoxic residue, because even trace amounts of cytotoxics could be hazardous to their health. Consequently, pharmaceutical companies should determine whether the CMO has adequate steps in place to eliminate external surface contamination, either through vial washing processes or other proven decontamination methods.

Air-Handling Systems: When cytotoxic molecules are produced in powder or liquid form, there is always a chance for minute particles to become airborne. Therefore, it’s critical that the facility have safeguards in place that protect workers and the environment. To this end, air-lock systems maintain the sterility of the clean room. Separate HVAC systems should be in place for the cytotoxic facility, and HEPA filtration systems are needed to filter effluent air and remove all traces of high-potency pharmaceutical products.

Waste Handling: Regulatory and environmental authorities require CMOs to take steps to ensure high-potency molecules do not leave the confines of the facility in water or solid waste. CMO customers should ensure the manufacturer has written procedures for handling and disposal of liquid and solid waste products and that the CMO’s environmental management system is certified by the International Organization for Certification (ISO). ISO 14001 is the international standard for environmental management systems.

As part of its waste-handling procedures, a CMO should collect 100% of water used in formulation and finishing operations; for example, all equipment would be attached to a separate piping system (eventually even running on negative pressure) and fed into a water treatment plant that cleans and removes cytotoxins. Similarly, all solid waste would be collected and sealed in bins and then incinerated to destroy all cytotoxins.

Training: Beyond cGMP training and having the appropriate equipment and facility design, CMO personnel should have a high level of awareness of the potential risks associated with cytotoxic drug manufacturing and know the strategies necessary for managing them. It’s important, therefore, to assess the level of ongoing training technicians receive. It also helps to tour the CMO facilities and speak with technicians to evaluate their knowledge and awareness.

2. Global Compliance and Experience

Makers of molecular-targeted cancer therapies, with narrow indications and small market share, would benefit from partnering with a CMO that has the experience to help streamline the product’s global availability. At a minimum, the CMO should be compliant with regulatory requirements of authorities in the U.S., Europe, and Japan. Beyond that, companies with extensive global experience are likely to have a thorough understanding of global regulatory issues concerning the production, packaging, and distribution of cytotoxic therapeutics, a working knowledge of multiple countries and their regulators, and experience in the regulatory review and approval process.

The length of time a company has been in the business of producing high-potency parenteral products is a good indicator of its experience, as is the CMO’s audit history with regulators and the number of countries to which it is qualified to ship cytotoxic products.

3. Corporate Culture

When a pharmaceutical company entrusts its molecule to a CMO for the first time, the choice of a manufacturing operation often is based on the CMO’s capabilities, qualifications, capacity, and experience. The second time the company assigns a molecule to the same manufacturing operation, the CMO’s corporate culture probably had a major influence on the decision.

Too often, a pharmaceutical company discovers whether it can work effectively with a CMO after the contract manufacturer has begun the process of bringing the company’s molecule to market. But there are several basic indicators that can help a company choose the right CMO the first time.

Key to the choice is finding a CMO that can document the level and quality of service it will provide, including the key point of contact and decision-maker throughout formulation, fill, and finishing phases, the internal processes that will be involved, and the escalation plan. The CMO also should provide potential customers with access to the individuals who will be responsible for production of the molecule, such as quality and technical service teams. Moreover, the CMO should be willing and able to document and agree to every aspect of the process, including score cards, metrics, batch release times, and exception times — before the manufacturing process has begun. CMOs that are able to document the level of service a company can expect are service organizations that have the best interests of their customers and healthcare consumers at heart.

High-potency agents — cytotoxic drugs, as well as prostaglandins, opiates, and certain hormones — comprise approximately 25% of all pipeline therapeutics,8 and innovations in cancer drugs are thought to be a considerable force behind the growth in this category.

As a variety of molecular-targeted cancer therapeutics move through clinical development, the drug industry is witnessing a trend toward outsourcing the manufacturing of these complex agents, and more CMOs are entering the high-potency market as a consequence.9

With more CMOs producing cytotoxics, drug manufacturers have greater choices and options. Thorough examination of a CMO’s experience is critical, however, because the choice of a cytotoxic manufacturing partner can have a direct impact on a company’s bottom line.

Production of cytotoxic molecules formulated for parenteral delivery is extremely complex, and requires multiple controls to ensure product quality, maintain the product’s aseptic state, and comply with standards for occupational and environmental safety. To this end, the manufacturer must ensure separation of the molecule from its employees and take multiple precautions to protect communities surrounding the manufacturing facility, healthcare workers who administer therapeutics in hospitals and clinics, and patients whose health and lives depend on a reliable supply of the drugs.

CMOs with experience in cytotoxics should have appropriate infrastructure in place and extensive technical and regulatory experience to comply with global standards for product quality and sterility, as well as occupational and environmental safety.

When evaluating a CMO partner, a pharmaceutical company will be able to evaluate a manufacturer’s capabilities and capacity for production of cytotoxic parenteral products, its safety record and its experience with global regulatory authorities. These are basic indicators of whether the company is committed to staying in the cytotoxic manufacturing business and keeping pace with changing requirements.

For extra measure, however, it pays to tour a CMO’s facilities and speak with the operators at the plant. Do they seem willing to go the extra mile to get a customer’s product to market safely and on time? The quality of employees on the front line of a manufacturing facility is a good meter of whether the CMO has a strong service culture, will maintain quality and safety standards, avoid production shutdowns, and assure continual supplies of life-saving drugs to cancer patients.

A CMO whose employees are committed to service is one that will help assure the financial survival of its customers. And they’ll do that by keeping patients — the ultimate customers — top of mind.

References

1. Therapeutic Categories Outlook. Boston: Cowen and Company; October 2007.
2. Targeted Cancer Therapies: Questions and Answers. June 13, 2006; Accessed March 12, 2008.
3. Rutledge CR. Human Drug CGMP Notes. March; Accessed March 12, 2008.
4. Despite more cancer drugs in R&D, overall U.S. approval rate is 8%. News release]. September 5; . Accessed March 3, 2007.
5. Dimasi JA. Risks in new drug development: approval success rates for investigational drugs. Clin Pharmacol Ther. May 2001;69(5):297-307.
6. Herrman M. When products fail. Nature Biotechnology Supplement. June 2001;19(6):BE37-BE38.
7. Amgen Boulder Inc · 10-Q · For 9/30/94. Securities and Exchange Commission. Accessed March 17, 2008.
8. Van Arnum P. Investing in high-potency manufacturing: market demand for cytotoxic drugs is leading CMOs to expand their API manufacturing and formulation services. Pharmaceutical Technology. Vol 31 2007:54-59.
9. Van Arnum P. Contract manufacturing organizations expand in high-potency manufacturing. Pharmaceutical Technology. Vol 30; 2006:62-66.

Sourcing APIs in Emerging Nations

Guidelines for new supply chains

Two years after filing a drug application, the FDA gives you the green light for your new medicine and you formally launch the product. But your work is far from done. In a few years, you can look forward to expiring patents, and if you don’t have a new blockbuster drug to maximize its sales exclusivity rights in the pipeline, you'll have a revenue gap of several billion dollars to fill. So what can you do about it? Develop a plan to reduce costs now so that you can maintain your competitive advantage in the future.

Where do you start on such a daunting task? Many pharma companies have begun by abandoning once-sacrosanct active pharmaceutical ingredients (APIs) and evaluating sources for newer ones that promise lower costs.

There are hundreds of sources sprouting up in the low-cost nations such as India and China, for thousands of different APIs. They offer great potential to deliver savings. Other industries have been leveraging these regions and generating tremendous value for more than a decade, so pharma companies offshoring in them is a no-brainer, right?

Well, not exactly. True, there are great gains to be had by pharma companies that integrate API sources from all over the world into their supply chains. However, there are also substantial risks which, if navigated unsuccessfully, can have catastrophic consequences. As we have seen in the food and manufacturing industries, tainted products traced back to suppliers in low-cost countries have led to large-scale product recalls and critical health issues.

The recall of lead paint-coated toys, for instance, cost manufacturers millions last year, while melamine-tainted wheat gluten found its way into several brands of pet food, killing hundreds of animals. In both cases, the outbreaks were traced back to rogue suppliers in China, which has traditionally imposed much looser environmental and quality standards than the U.S. and has been very lax in its enforcement of the standards it does have.

Pharma companies sourcing APIs must be aware of these issues, as the consequences of contaminated products will be far worse for them than any food or toy recall. Although the lead and melamine incidents spawned hundreds of articles and new proposed measures from various governmental agencies, the cacophony generated over the first significant API failure will make them sound like a symphony. If the public cannot trust its medicine, the government and general public could potentially reach new levels of consumer panic.

In addition to the intense PR and financial hits of having to execute a recall, pharma companies face another major risk. With a 17-year window of exclusivity on its drugs (give or take), pharma companies face a tight timeline for maximizing patents’ profits. Even if a company catches harmful chemicals in the testing phase before a product goes to market, the testing phase could be delayed as long as two to three years. And this reduces the amount of time left to capitalize on the de facto monopoly they have on the drug in development.

Pharma companies can certainly obtain all of the economic benefits of outsourcing APIs to low-cost countries while avoiding these pitfalls, but they have to consider several important points.

Do Not Let the Government Do the Work for You

In one sense, the FDA’s presence helps to provide a clearer picture of what is expected of the U.S. government. The agency puts healthcare through a much more intricate quality control process than governmental bodies overseeing other industries. However, pharma companies must go above and beyond the government’s standards and make sure they police API sources on their own. For one thing, as stringent as the agency’s directives are, FDA approvals are oftentimes attributed to political factors. If a substandard operation lands in one of these “blind spots” within the FDA’s approval cycles, it could bite pharma companies down the road in a way that would be far worse than an initial rejection by the agency. Pharma companies should always hold their API sources to higher standards than those set by the FDA.

Long-Term Commitment Requires Short-Term Investment

Pharma companies setting up in low-cost regions need to understand that it will take several years to get their API sources operating smoothly and complying with the aforementioned high standards on their own. Consequently, a large investment needs to be made upfront, including a strong presence on the ground to hold new suppliers’ hands from the setup of these procedures through their continuous execution. Pharma companies not only need to walk suppliers through these processes a few times, but monitor them thoroughly and regularly to ensure that they don’t cut corners or misinterpret expectations.

Pharma companies observing successful manufacturers who already have their offshore suppliers seamlessly integrated into their supply chains have to realize that this does not happen overnight, or even within a few years. Pharma is today at the point where manufacturing was 10 to 15 years ago. It took manufacturers more than a decade to establish smoothly running global supply chains and it will be at least that long before the training wheels come off and API sources are riding on their own.

Limit the Number of Offshore Partnerships

Every year, new API sources sprout up in low-cost countries, covering a wide variety of specialty chemicals. This might lead to the temptation of partnering with dozens of low-cost API providers in order to diversify the supply chain and maximize cost savings opportunities. However, given the tremendous time and financial commitment that goes into developing an API source in these regions, it is best buyers focus on quality, not quantity. Rather than attempting to cultivate high standards in many suppliers, concentrate on one or two so that you can ensure tremendous quality over the long haul.

High Standards Begin with Due Diligence and Continue with Ongoing Supplier Performance Management

The best way to create and enforce high standards is to conduct a rigorous and thorough process to identify the right supplier(s) to partner with, and to make quality and safety critical focus points to analyze, confirm and monitor on a regular basis. One way to do this is to make safety a criterion in the RFP process for initial selection. It is the nature of business for suppliers to be most attentive to your needs when they are fighting for new revenue. Therefore, pharma companies can set the tone and have potential partners demonstrate that they have high-quality safety standards in their proposals. This not only makes suppliers aware of safety from the get-go, it sets up a baseline that can be used to measure performance on an ongoing basis.

Another critical factor is to establish and maintain an on-the-ground presence to ensure that suppliers are held accountable for the standards you set. Pharma companies need to perform random batch testing, actively monitor day-to-day operations and have suppliers undergo frequent audits. If they rely on periodic site visits to do this, they have already failed. Any potential problems need to be identified well before they can impact products headed for pharmacy shelves.

Industry pundits agree that successful offshoring will be for a key driver of success for drug companies in the long term. So the question is not whether to utilize offshore API sources, but how to manage them to reduce costs without sacrificing quality. Pharma companies that invest in solutions and processes now that enable them to evaluate and manage new markets and sources of supply will ultimately realize the greatest benefits that low-cost regions can generate down the road.