ISPE Central Canada Chapter

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Pharmaceutical contract manufacturing challenges

• ISPE Central Canada Chapter
• Annual Meeting
• September 28, 2006
• Yvon R. Tessier

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Outline

• Traditional positioning of the CMOs
• New trend in Contract Manufacturing
• Challenges
• Opportunities
• Threats
• Can we make the difference?
• Q A

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Traditional positioning of the CMO

• Not so long ago, big pharmaceutical companies
  turned to CMOs solely to supply
• cost efficiencies
• capacity
• time-to-market
• expertise not available in-house

Source Pharmaceutical Technology,  Feb, 2004  by
Doreen R. Coppola
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Product Life Cycle Curve
Time to market
Capacity
Cost
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Traditional relationship

• Pharmaceutical Cie.
• Owns the know-how
• Manages technology transfer
• Needs short term capacity
• Unexpected sales
• Launch quantities
• Limit risk on new technologies

• Contract Manufacturer
• Limited know-how
• Minimum involvement in transfer
• Provides manufacturing capacity
• Equipment
• Labour
• Specific technology

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New trend in Contract Manufacturing

• Companies are outsourcing to concentrate on
  marketing their products
• Spending less time in drug discovery and
  manufacturing
• Virtual companies exist by the simple fact that
  they can rely on the contract manufacturers and
  researchers

Source RB-203 Pharmaceutical Contract
Manufacturing and Research, BUSINESS
COMMUNICATIONS COMPANY, INC Published April 2005
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New business model
Note Some CMOs offer more than one service
such as formulation, analytical and regulatory
expertise
?
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Challenges

• Opportunities Threats

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Opportunities

• Worldwide revenue for contract manufacturing and
  research for the pharmaceutical industry was
  estimated at 100 billion in 2004 and is expected
  to rise at an average annual growth rate of10.8
  to 168 billion in 2009

Source RB-203 Pharmaceutical Contract
Manufacturing and Research, BUSINESS
COMMUNICATIONS COMPANY, INC Published April 2005
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Opportunities
World-Wide Revenue of Contract Manufacturing and
ContractResearch Organizations, 2002-2004 and
2009 ( Billions)
Source RB-203 Pharmaceutical Contract
Manufacturing and Research, BUSINESS
COMMUNICATIONS COMPANY, INC Published April
2005
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Threats

• Emerging countries like India and soon China will
  provide low cost products that will meet cGMPs
• The old business model will not sustain growth
  for North American CMOs
• The new business model is more complex and
  requires different skills

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Product Life Cycle Curve

• High capacity
• Low cost

• Low cost

• Time to market
• Technology available
• Technical expertise
• Proximity
• Quick reaction
• Proven quality system

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Can we make the difference?

• The battle will be fought on the technical field
• Technological Challenge
• Latest technology ?
• Scalable process equipment
• Validation
• Compliance to cGMPs
• Documentation
• Project management
• Dont forget SHE !

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Technological challenges

• The need to keep pace with next-generation
  process technology becomes more challenging.
• In the case of many emerging pharmaceutical
  products, the challenge is to make viable
  commercial production possible at all.
• COMs need to invest in technology and people

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Latest technology ?

• We need to stay aware of new technology
  development
• Sometimes old technology is the best option
• Staff from RD, Validation, Production and
  Maintenance must be trained and have as much
  exposure to information about new technology as
  possible

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Scalable process equipment

• New business often starts at lab or pilot scale
• Clients prefer to scale-up without having to
  change manufacturing site
• Equipment selection can improve chances of
  attracting new business

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Validation

• The need for small scale cGMP batches has
  increased so RD equipment needs to be qualified
  (IQ/OQ).
• Cleaning validation is one of the biggest
  challenges for a CMO since dedicating equipment
  is not economical.
• Change control procedures must be closely
  followed.

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Compliance to cGMPs

• Most clients intend to market product world wide
• Quality system must meet regulation in multiple
  markets plus clients internal standards
• Other clients rely on CMOs quality system since
  they dont have internal resources

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Documentation

• New projects start at pre-clinical stage
• Process is improved along the way
• Batches are made for development, scale-up,
  stability, clinical trials and process validation
• PAI may occur years later
• Good documentation practices must be followed at
  all times (even if clients do not request it
  explicitly)

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Project management

• New projects involve many organisations
• All functions from all partners will get involved
  at one time or an other
• Project scope will evolve and scope changes must
  be managed carefully
• CMOs are becoming technical expertise providers
  and they must behave accordingly

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Dont forget SHE !

• Safety Health and Environment must always be kept
  in mind
• Clients may outsource hazardous processes
• Large firms have very strict SHE requirements
• The hazards of handling multiple processes
  involving new chemicals must be evaluated
• New drugs are more and more potent
• No one can afford a serious SHE incident

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In conclusion

• Contract Manufacturing Organisations will have to
  adapt to a new business environment
• Successful CMOs will be the ones with the
  strongest technical staff capable of
  participating in multidisciplinary project teams
• ISPE members will benefit from those
  opportunities

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Questions ?Comments ?