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CPhI Annual Report warns pharma manufacturers that don’t invest in continuous manufacturing will be forced out of market


04/10/2018
CPhI Worldwide, the world’s largest pharma event – taking place in Madrid (9-11, October 2018) and organized by UBM (part of Informa plc) – releases its annual report analysis of opioid contract services and continuous manufacturing. Ahead of the event’s opening next week, the findings highlight major treats and opportunities for CDMOs and pharma companies over the next 1-5 years.
 
Emil W. Ciurczak, of Doramaxx Consulting, and Fiona Barry, editor at PharmSource, a GlobalData product, respectively analysed ‘the effects of continuous manufacturing’ and ‘contract manufacturing in light of recent DEA quota changes for controlled substances’.
 
Over the next five years, Emil Ciurczak predicts exponential growth of continuous manufacturing driven by competitive and financial pressures, better equipment and a larger pool of trained scientists.  He boldly predicts that all generic manufacturers and CMOs will need to convert to continuous manufacturing facilities in the next 10-years.
 
“The companies who have begun using CM have enjoyed (overall) success, making products faster and with virtually no rejects. The movement from development to full-scale production, skipping the scale-up step (as much as six months) brings the products to market faster. The question is no longer, “Will Continuous Manufacturing work?” but “When will everyone be doing it?”, added Ciurczak.
 
He suggests that many pharmaceutical companies may not yet feel the need to convert to continuous manufacturing, as there is less financial incentive to streamline the manufacturing process for innovative medicines, which can yield thousands of dollars of profits. However, he explains that industry-wide changes are putting production costs under new scrutiny. Competition between countries, the imposition of pricing restrictions and the constant cost of R&D means that simply raising prices to consumers may no longer be a viable option so ultimately, he forecasts that big pharma that declines to invest will be left behind – and this change will take place within the next 5-10 years.
 
Fiona Barry identified opportunities and threats created by recent changes in US regulations. In particular, she predicted many CMOs will be hit hard by the proposed production cut of opioid compounds by the DEA to combat the opioid addiction crisis. Conversely, she also predicted that the development of non-opioid painkillers could be a possible replacement revenue stream and will become a profitable opportunity for CMOs and drug companies in the near future.
 
“Out of the 30 CMOs involved in commercial drug manufacture using controlled substances, 18 (60%) produce opioids. While contractors involved in controlled substance production constitute a minority of US CMO facilities, it is clear that they will be hit particularly hard by the reduced volumes of opioid manufacturing. The ever-growing number of opioid lawsuits—such as the US state lawsuits against Purdue Pharma—is likely to deter pharma companies from producing and outsourcing these products in the future.
 
“However, opportunities for CMOs and drug companies relating to non-opioid painkiller manufacture are likely to become more lucrative in the future, as alternatives to addictive opioids are sought,” concluded Barry.
 
In addition to these opportunities, Barry went on to predict that there may also be many new approvals for cannabis-derived drugs in the pipeline. She pointed to shifting regulatory attitudes – following the first FDA approval of a plant-derived cannabinoid drug, Epidiolex – as well as the recent DEA quota changes, which will increase maximum marijuana volumes by 250% in 2019 as evidence of these emerging trends.    
 
CPhI Brand Director Europe, Orhan Caglayan added: These findings are particularly relevant to many of the CDMO exhibitors at ICSE who are already exploring and invested in continuous manufacturing approaches. Our experts suggest the industry may now be undergoing a fundamental long-term shift in manufacturing and many of the sessions at CPhI Worldwide will explore these implications. Similarly, there are clearly both opportunities and challenges ahead in the short and long term in relation to opioid and alternatives manufactured for the US market. This is an evolving space and I would encourage both branded pharma and CDMOs to study how they adjust their business, with CBD compounds widely seen to represent a quickly growing sector."
 
The full findings of the CPhI Annual Report – including 11 in-depth expert contributions as well as the CPhI Manufacturing and Bio leagues tables – are available for free at https://www.cphi.com/europe/cphi-annual-report
 

CPhI Annual Report expert summaries:
 
Emil W. Ciurczak, Doramaxx Consulting - Trend Summary
 
  • Huge opportunity for China to be the fastest adopter to Continuous Manufacturing in the next 5-years.
  • Predicts that generic manufacturers and CMOs will all need continuous manufacturing facilities to complete within 10-years
  • Warns biosimilars may well bring prices down in the short-term, but warns in the longer-term will remove incentives to perform innovative research.
  • Big pharma will reinvest profits and bring down cost meaning its products, once off patent, can compete with generics. Big pharma that declines to invest will be left behind, especially as development timelines could be sped up by 6-months in one year with CM (no scale-up).
  • A convergence of more advanced equipment, competitive pressures, a wider pool of trained scientists and the backing of regulators will see exponential growth of continuous manufacturing over the next 5 years
    • initially these may not be optimally economically efficient, but in 5 years these will bring in tremendous economic and business process advantages, including faster and more efficient drug development
 

Fiona Barry, Editor, PharmSource, a GlobalData Product - Trend Summary

  • CMOs will be hit hard by the reduced volumes of opioid manufacturing imposed by the DEA. The proposed cuts will reduce production of an average of 10% to the most abused opioid compounds – oxycodone, hydrocodone, oxymorphone, hydromorphone, morphine and fentanyl – to take place next year as part of an initiative to cut opioid prescriptions by one third over the next three years. 
  • Conversely, many bills such as the Opioid Crisis Response Act of 2018 have been introduced to support the development of non-opioid painkillers, making this a new and potentially lucrative opportunity for CMOs. Furthermore, the outsourcing of the manufacturing of new drugs to treat opioid addiction will continue to provide opportunities to the CMO industry.
  • The DEA will increase maximum marijuana volumes by 250% from 444kg to 1,140kg in 2019.
  • Epidiolex, the first FDA approved drug to contain a purified drug substance derived from cannabis, triggered the DEA to signal that they will change the categorization of CBD-based medicines to allow access to it.
  • Many approvals, schedule changes and manufacturing contracts are forecast for CBD-based medicines following the successful release of Epidiolix, which is predicted to reach $1.2B in sales in 2026.