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Weighing the Potential for APIs and Finished Dosage Forms in Emerging Markets

New markets for drug manufacturers are emerging worldwide in regions that have typically purchased and imported drugs in finished dosage forms. While this shift has been underway for a few years, the focus on drug manufacturing self-reliance has surged in response to supply chain security concerns that came to light during the COVID-19 pandemic.

As a result, global interest in sourcing APIs to manufacture drugs locally is growing. Here’s a quick overview of potential opportunities in key regions.

Sub-Saharan Africa

According to a recent report by McKinsey & Company, most of sub-Saharan Africa currently relies on imports for up to 70-90% of over-the-counter and prescription drugs. The resulting strain on both government and household budgets has many regional leaders considering the promotion of more local production.

Most countries in the region are still at the earliest stages of pharma industry development. Only Kenya, Nigeria, and South Africa have industries of moderate size – and almost all of them source APIs from other manufacturers. This is partly because most countries in the region lack a chemicals sector (and infrastructure) needed for API production, and partly because the cost of locally produced APIs would likely be 10 to 15 percent more expensive than imports – notably from India.

While the report acknowledges many benefits local drug production could bring to the region, development of a local industry is likely to take several decades at least. In the near term, the report suggests that drug-product formulation is the better bet until new technologies lower the costs of producing APIs locally.

Middle East/North Africa (MENA)

Pharma markets in the MENA region vary considerably depending on where you look. An analysis of the region by CHEManager, for example, notes that Saudi Arabia imports 85 percent of pharmaceuticals because of its high spending power and cultural preference for foreign brands. Egypt, by contrast, produces 90 percent of its drugs domestically, with a much larger slice of its market share made up of generics.

Manufacturing and distribution networks are strengthening in the region, especially in Morocco, Tunisia, and Algeria. These are building on already-strong and established markets in Egypt and Israel. CHEManager also stresses the importance of the Gulf Cooperation Council (GCC), a multinational partnership consisting of Bahrain, Oman, Saudi Arabia, Kuwait, the UAE and Qatar, which is working to standardize drug prices and reduce regulatory barriers. Notable among their efforts is a free trade agreement with India. This is likely to increase generic penetration into the Middle East market and grow demand for imported APIs as MENA companies continue to ramp up domestic manufacturing.

Latin America

Latin America’s high-growth economies, rapid urbanization, and aging populations are driving a growing pharmaceutical market. According to Mordor Intelligence, the region’s pharma industry is expected to register a CAGR of 6.8% between 2020 and 2025. Foreign investment from India, the U.S. and Europe are on the rise, thanks to growing domestic drug consumption, low manufacturing costs and government incentives.

Pharma Manufacturing and other industry-watchers consider Brazil one of the most promising pharma markets in the region. This is partly due to its population, which is the sixth largest in the world. Steady growth is another factor — about 7 percent year over year from 2015–2020, despite a recession from 2014–2017. According to the São Paulo pharmaceutical industry business association, Sindusfarma, the Brazilian Ministry of Economy registered 418 pharma manufacturing plants in the country in 2018.

Like many countries, Brazil currently imports about 90 percent of its APIs from India and China. COVID-19 has led to discussion of incentives to bolster local production of APIs. One analysis also anticipates significant growth in Columbia, which several companies have tapped as a regional production and distribution hub.


The Asia-Pacific region (APAC) has been called “the new life sciences” frontier by L.E.K. Consulting. A recent special report from L.E.K. highlights a variety of attractive market entry opportunities for pharma companies. With more than 60 percent of the world’s population, regional healthcare expenditures in APAC are projected to grow by 7 percent annually to US$2.4 trillion by 2022, outpacing growth in both the U.S. and Europe. While most manufacturers have typically focused on the large markets in Japan and China, lucrative opportunities are also emerging in Taiwan, Korea, Australia, Singapore, Indonesia, and Thailand.

While APAC is a convenient geographical category, the APAC market itself is highly fragmented and there’s no one-size-fits-all approach. For example, developed markets like Australia and Singapore have advanced healthcare systems and policies that make it easy to establish a local or regional presence. Emerging markets like India and Vietnam offer different opportunities – notably from growing middle classes that want higher-quality options than the universal healthcare their countries provide. The L.E.K. report divides the region into five categories, each with different entry recommendations.

Neuland Labs: Global Partners in Potential

Interested in pursuing opportunities in any of these regions? Neuland can help you make the most of opportunities around the world by supporting your efforts with strong global regulatory experience, complex chemistry expertise and bulk manufacturing capabilities. Contact us today to learn more.

Economic Nationalism or Global Cooperation? How About a “Thank You,” Instead?

I saw this lede for an article (Bio/Pharma, People, Perseverance, and Hope) about 2020 by Rita Peters at PharmTech and smiled. It captured the state of life sciences this past year perfectly:

After a difficult year, bio/pharma science delivers promising results.

It’s hard to imagine the amount of turmoil we’ve endured. From an unknown, uncharacterized disease in January, to the first vaccines entering circulation in December. In between, tests were developed & deployed, treatment modalities were implemented…and refined. A score of FDA Emergency Use Authorizations (EUAs) were approved for use. Technologies were adapted. Trials were recruited and run. Regulators reviewed the findings. Approval was given. Product was shipped.

Less than 12 months from initial disease discovery to a publicly available vaccine.    

Just think about what that represents in terms of progress – for science generally, for healthcare, for our ability to confront health threats in real-time.

The official Word of the Year may not have been ‘unprecedented,’ (‘pandemic’ and ‘lockdown’ were apparently winners), but 2020 certainly was unprecedented. As anyone in the pharma industry will tell you, it was astounding…and the result of a great deal of dedication and hard work by teams spread around the world.

Rita Peters (rightfully) concludes the article by thanking those whose work has impacted us all. I cannot agree with her more, and wholeheartedly second her words:

“As the year closes, Pharmaceutical Technology extends its appreciation to the bio/pharma professionals and companies who worked tirelessly to drive science-based solutions to the pandemic. Your efforts—often misunderstood or criticized as being too slow by the public and policymakers—were heroic.

We also owe gratitude to the front-line healthcare workers who made personal sacrifices to care for others; and all essential workers who kept everyday life near normal for everyone else.

You are the story of 2020.”

As we turn our attention to 2021, many challenges remain.
Just as barriers to global trade appear to have risen higher than they’ve been in years, we’ve finally started creating a blueprint for global collaboration against disease. We’re standing at a crossroads.

Along one path, a global, cooperative path towards healthcare and drug supply chains.

Along the other path lies individual nations focused on supply chain self-reliance – which will likely come at the expense of collaborative innovation and speed.

Ultimately, of course, the future will likely be a combination of both.

On the one hand, our global response to COVID – while certainly not without its flaws – demonstrated the industry’s ability to work with regulators, governments, academia, non-profits and even each other to address an immediate threat to human health. That’s pretty intoxicating. It would be both reckless and difficult to step back from our ability to ‘globalize problem-solving.’

At the same time, no country – or company – is immune to the challenges posed by supply chain risk. In previous posts (e.g., here and here), we’ve discussed steps we’ve taken at Neuland to mitigate and control risks. These efforts by industry are here to stay. Companies have already started scrutinizing projects across the lifecycle for potential supply chain risks – and are taking actions to mitigate risks accordingly.

The jury is still out on supply chain reshoring. Much will depend on how unwavering political leaders will continue to be in their push to reshore an industry with such complex and far-reaching supply chains. Widely-publicized drug supply disruptions or shutdowns in recent years have brought ever-increasing attention to supply chain management. But COVID19 – and the initial threat of drug disruptions early in the pandemic – forced a major reconsideration of supply chains. The urgency to bring an entire industry onshore in many countries has already run headlong into reality,   with a narrower focus emerging on medications most at risk for disruption.

So where does this leave us for the remainder of 2021?
Unfortunately, it leaves us with some global unsteadiness and uncertainty. On the bright side, while we’re still waging war against a virus, our arsenal of tests, treatments, vaccines and resources is much better equipped than it was a year ago. And for that, we owe our thanks to everyone who made that possible.

So I leave you again with Rita Peters words of gratitude, extending appreciation “to the bio/pharma professionals and companies who worked tirelessly to drive science-based solutions to the pandemic. Your efforts—often misunderstood or criticized as being too slow by the public and policymakers—were heroic. We also owe gratitude to the front-line healthcare workers who made personal sacrifices to care for others; and all essential workers who kept everyday life near normal for everyone else. You are the story of 2020.”

Improving Investigations: An Inspector’s Perspective

Facility inspections continue to be on the minds of both drug manufacturers and regulators. Over the past year, we’ve discussed the challenges surrounding inspections Facility inspections continue to be on the minds of both drug manufacturers and regulators. Over the past year, we’ve discussed the challenges surrounding inspections in our Maintaining Quality and Supply During COVID-19 blog post, as well as providing an update on current Regulatory Guidance for Facility Inspections.

While the official guidance relating to inspections during the pandemic is useful up to a point, it only goes so far in dispelling confusion and providing useful advice. So it was refreshing to see a far more candid and direct blog recently written by Callum McLoughlin, an inspector at the U.K. Medicines and Healthcare Products Regulatory Agency (MHRA) Inspectorate. This piece contains a wealth of useful insights, which are summarized below.

In this post, McLoughlin draws on his recent inspection experience and current deficiency data to highlight some of the most common issues they encounter at companies of all sizes and operating models. In particular, he stresses the importance of the Corrective and Preventive Action (CAPA) system and investigations. His preamble notes that “roughly 10% of deficiencies raised in [the most recent] period were directly attributable to poor investigations”, and that these “could also be the root cause of other deficiencies too”.

So, What Do Inspectors Observe?
When inspecting, GMP inspectors are looking for “evidence that the investigation and Corrective and Preventive Action (CAPA) system is operating in a state of control.”

Red flags that suggest this is not the case include:

  • Investigations being raised long after the event occurred or taking an unreasonable time to complete
  • Root cause analysis being raised as a CAPA to enable premature deviation closeout
  • A large proportion of CAPAs being overdue or being extended
  • Human error being listed as a frequent root cause

McLoughlin is also wary of situations where root causes are deduced based on past experience rather than evidence:

“Professionals in industry have a lot of experience and knowledge, however this can sometimes mean that a theoretical root cause can be concluded based on previous experience – this is especially true if investigators are not given freedom to apply relevant challenge to all relevant processes and systems. This can lead to conclusions being reached based on assumption rather than an evidence-based investigation.”

What About Human Error?
There’s no question that human error can be a potential root cause. But before citing human error, a thorough investigation is needed to evaluate all other system and process-related variables.

“A common manifestation of this is where companies take the view that long-standing procedures and methods work perfectly and cannot be improved, with errors associated with the task attributed to individuals not following instructions accurately. When the same or a related problem has occurred on several occasions and with different people this is a clear indicator that human error is unlikely to be the true root cause.

Human error should only be cited as root cause when all other system and process related variables have been ruled out. It is plausible that, where human error is a potential root cause, the true root cause could be deficiencies in the training system, an overly complex or difficult to follow procedure, or perhaps other factors such as inappropriate multi-tasking and distraction. It is unlikely that ‘remind/re-train the operator’ will ever be an effective CAPA in such circumstances.”

For more insights about the current state of inspection procedures, check out our December Update on Regulatory Guidance for Facility Inspections at NeulandLabs.comWhat Inspectors Like to See
In addition to the warning signs discussed above, McLoughlin also sketched out what “good” looks like from an inspector’s point of view. His inspectorate likes to see the following:

  • Effective investigations — Launched with the intention of identifying the true root cause and appropriate CAPAs. McLoughlin notes that investigations should look beyond the first probable root cause to rule out other possibilities.
  • Risk assessments — Evidence-based assessments should be detailed enough to cover all reasonable risks, rather than simply building cases to support prior decisions.
  • Consideration of patient safety — The impact of quality, safety, and efficacy risks on patients should be central to all investigations.
  • Systematic root cause analysis —McLoughlin recommends several proven approaches to root cause analysis that deliver “clear advantages.” A red flag for inspectors are the words “true root cause could not be identified” in your report.
  • A well-managed system — Investigation support systems should be monitored to ensure that they deliver meaningful information. In particular, McLoughlin calls for scrutiny during management reviews and escalation to keep the system in control when things go wrong.

For more insights about the current state of inspection procedures, check out our December Update on Regulatory Guidance for Facility Inspections. You can read McLoughlin’s full post here.

Europe Looks to Tighten Supply Chains

The last nine months have seen a complete re-evaluation of the risks inherent in global pharma supply chains. COVID-19 forced a doubletake in C-suites, but concern was already well on the rise. And while politicians the world over have focused on ‘bringing drug-making back home,’ the industry as a whole has been busy considering key mitigation strategies to avoid disruptions and shortages both in the near-term as well as strategically.

Supply chain security, a long-time fixation for us at Neuland, is finally getting attention. For years, aside from limited mishaps, the global pharma industry experienced the upside of globalization. More options. More sources, Faster turnaround times. Seamless distribution.

But the pandemic exposed the shortcomings. These shortcomings weren’t necessarily shortcomings of globalization itself, but rather an industry-wide failure to appreciate the reality of certain risks and the mitigation steps which suddenly become mission-critical when things go wrong.

To be fair, some supply chain issues have little do with COVID-19. Drug shortages for example, while an issue that emerged in the early days of the pandemic, are not a recent phenomenon. A July 2020 EU Report on the shortage of medicines noted that drug shortages increased 20-fold between 2000 and 2018…and 12-fold since 2008.

The EU report’s recommendations for strengthening drug supply chains among member nations are similar to those proposed or initiated elsewhere during 2020, such as the U.S. and India. Chief amongst them – and a popular stance in an increasingly weary and watchful world – securing or reshoring domestic sources of supply.

While the report calls for a relocation back to the European Union of pharma plants, this would appear – as with the U.S. – to be a longer-term strategic objective. Realistically, outsourcing – and supply chains which cross countries and continents – will continue, albeit with much more attention paid to supply-related issues.

 A Global Call to Improve Supply Chain Transparency
Transparency in drug manufacturing and distribution is already on the agenda, as the final elements of the US Drug Supply Chain Security Act take effect in the next few years. The focus on transparency will likely broaden, as supplier quality programs, precursor & intermediate sources, facility redundancies, and other measures which could have a downstream impact are more thoroughly scrutinized.

The good news is that there are a multitude of steps pharma companies and their suppliers have taken – and are increasingly taking – to control and manage supply chain risks.

Are Your Suppliers Also Competitors?
One more quick point, however, before we discuss some of the steps companies are already taking to reduce supplier risks. In growing numbers, API manufacturers are jumping into the drug game with generics – competing against their potential customers. Pharma companies evaluating their confidence in suppliers should consider whether today’s supplier is tomorrow’s generic competitor. The safest bet is to find an API supplier who is (and intends to remain) a pure-play API provider focused on maximizing the value of your drug.

It Starts with a Focus on Quality
COVID-related supply chain issues did not stem from quality issues, but plenty of other drug shortages, alerts and recalls have. Being at ease with a supplier’s quality system is no longer optional. It’s the only choice for companies worried about supply chain risks. Vendors should be thoroughly vetted, and a clear understanding of how their quality systems function should be ascertained.

A supplier quality checkup should focus in equal parts on both regulatory track records and their expertise with your specific developmental and commercial needs, namely, proven experience with your project’s chemical reactions and classes of molecules.

Building Redundancy is Key
Redundant production suites & multiple production sites in isolated facilities are another measure pharma company execs are increasingly looking for to better manage risk. Suppliers should have in place

internal supply chain risk mitigation capabilities. We discussed some of these capabilities in a 2019 post:

“In the event of a natural (or compliance) disaster, they will ideally have in place alternate sites or facilities capable of providing seamless supply, at the capacities and frequencies you require. In some cases, an API supplier may be willing to develop the process on your behalf and outsource the manufacturing to further secure supply chains.”

Backward Integration of High Risk Supplies or Processes
Those companies which have embraced backward integration are well-positioned to weather future supply chain disruptions. Backward integration – in which a company internally produces their own raw or starting materials – is a critical step towards securing and stabilizing the supply of active pharmaceutical ingredients. In-house synthesis reduces dependence on other – typically foreign – chemical manufacturers for precursors and raw materials.

It reduces risk by ensuring greater control over the process, and eliminates the need for multiple raw ingredient sources – a practice which can lead to product variance/consistency and quality issues.”

At Neuland, our efforts to backward integrate intermediates pre-dated the pandemic, and coincided with our acquisition of Unit III. This extended our capabilities to manufacture intermediates as needed. From our standpoint, exerting greater process control allows us to ensure production, compliance and quality targets are all consistent & predictable.

As we have seen in the U.S., India and now the E.U., concerns over supply interruptions have risen to become top-of-mind. While longer-term strategies to re-establish domestic supply sources may (or may not) prevail, a sharpened focus on supply chain risk mitigation efforts – extending to your supplier’s suppliers and beyond – is always a sensible approach.

Pharma Trends for 2021

Seven 2021 trends for the small molecule pharmaceutical and contract manufacturing spacesAfter 2020, trying to predict anything at all seems a bit reckless. Most of us are still trying to wrap our heads around last year — and hoping this year will follow a different trajectory. Looking back at the various trends outlined in January of last year, I think we can all be forgiven for not having seen the 800-pound gorilla named “COVID-19” sitting quietly by itself in the corner of the room.

COVID, of course, did happen. And while many predicted trends fell by the wayside, the industry has seen some significant changes.

  • Global collaboration exploded.
  • Supply chains were forced to become more robust, or at least to begin the transition to redundancy.
  • Research — and later development and clinical — programs scaled up at speeds never before imagined.

Remarkable things happened, and continue to happen, that will have a lasting impact on the industry.

So what can we expect in 2021?

Here are seven trends (admittedly more modest than developing vaccine candidates for a novel virus in six months) we forecast for the small molecule pharmaceutical and contract manufacturing spaces.

1.       Big Data & AI

Computers are still no match for the human brain. But there are many tasks they can perform faster or more efficiently — like sifting through vast amounts of data or keeping tabs on conditions in manufacturing facilities. And unlike us, they don’t need to sleep.

There isn’t enough paper in the world to record and store the growing tsunami of data in the pharma industry alone (not that we’d have the time to write, type, or print it all, much less make any use of it). Pharma manufacturers are already on the cutting edge of these technologies, using them to keep production lines moving at optimum efficiency, build models to predict drug effectiveness, and enhance clinical trials. Many manufacturers are watching this space for the industry’s next major technological breakthrough, and backing their bets with significant R&D funding.

It’s not just manufacturers that are getting into the act — regulators are starting to catch on to the potential for AI to help ensure compliance. And some firms are even using AI to guide merger and acquisition (M&A) choices. Which brings us to…

2. M&A activity

While pandemic shutdowns may have stalled some M&A activity, there are still plenty of big fish eager to gobble up smaller upstarts. This is true not only for pure pharma companies, but across contract manufacturing organizations (CMOs), contract research organizations (CROs), and contract development and manufacturing organizations (CDMOs).

Companies that have done well as a result of COVID-19 will be the most obvious targets, especially the mid-sized pharma and biotech firms that are playing key roles in the development of vaccines and virus testing. Digital firms also look attractive. The pandemic gave a significant boost to digital healthcare, and industry-watchers expect those trends to continue when things return to normal.

At the same time, many investors smell blood in the water among device manufacturers, pharma companies, and other firms not related to COVID-19. Many of these are struggling as a result of sharp declines in elective procedures, both from pandemic restrictions and patient fears of going anywhere near a medical facility. Bargain-hunters think many of these will be eager to deal once credit starts flowing more freely again.

3. Increased focus on impurities

In the last two years, the API world was turned on its head when genotoxic impurities (GTIs) were found in medications that had been approved years before. They were first discovered in a generic version of valsartan — even though the manufacturer had followed best practices to the letter — and later in ranitidine samples. (For more background, check out our recent blog post: “The Impact of Impurities on the Pharmaceutical Industry”).

Unsurprisingly, API manufacturers and their partners quickly scrambled to overhaul established practices and safety standards, and not just because global regulatory agencies started tightening the screws. After all, no sane company wants to negatively impact human health or lose a profitable product, much less face the fallout from a similar PR nightmare. Major investments in equipment and personnel are on track to continue well into the coming year, and probably beyond.

4. Deeper outsourcing partnerships

Contract organizations have growing incentives to expand their operations, boost efficiency, grow their reputations, and build long-term relationships with their clients. Expect more of the same in 2021.

Big pharma companies continue to expand their reliance on CMOs, CROs, and CDMOs. That’s good for the business of these partners, but it also brings them under more pressure to deliver top performance. Big Pharma also wants to cut costs by not owning everything anymore, so they’re looking for partners who can routinely provide a diverse range of services, not just handle isolated projects on an as-needed basis.

These trends continue to reshape the way contract sector does business (not to mention driving some of the M&A activity we covered earlier). Contract organizations have growing incentives to expand their operations, boost efficiency, grow their reputations, and build long-term relationships with their clients. Expect more of the same in 2021.

5. Regulatory backlash?

For global regulatory agencies, “COVID-19” might just as well have been spelled “CATCH-22.” Practically overnight, the on-site safety inspections they’ve historically relied upon to keep the industry safe became a significant safety risk in and of themselves. Rather than risking even greater drug shortages or delays in the development of treatments for the pandemic, regulators gritted their teeth and permitted unprecedented accommodations to inspection practices (when inspections weren’t simply delayed indefinitely).

Most – if not all – of the resulting guidance documents prominently featured the word “temporary,” and there were attempts to get back to something more like business as usual in August and September. Regulators backed off a bit when new virus surges began running wild, but their willingness to let the industry police itself will evaporate overnight as soon as vaccines, the lifting of travel restrictions, and other measures make it safe to perform on-site inspections again. When that happens, you can expect to see a rash of international inspections by the FDA, EMA, and other leading regulatory bodies. Whether this will be a full-scale effort remains to be seen, but a significant backlog has piled up in 2020. Woe to any sites that are found wanting.

6. Supply chain security

The global rush to secure domestic supplies and production capacity — whether in Brussels, New Delhi or Washington DC — is expected to continue. The victory of Joe Biden in the US presidential election is likely to reduce nationalistic trade policies somewhat, which may ease some of the pressure. Even so, many industry players had a significant scare when supply shortages started to bite, especially those that relied on a single source for critical APIs.

Keeping costs at rock-bottom is still a top priority, but after the pandemic it won’t be the only one. You can’t make a profit if you have nothing to sell. Efforts to address supply vulnerabilities are just getting started, and will take years to fully implement. Watch for more reshoring in the long-term, and a focus on redundancy and supply chain security in the short-term.

7. More Generics

Patent expirations will continue to drive the growth of generics in the coming year. An estimated 37 drugs came to the end of their exclusivity periods in 2020 – or soon will in 2021 – opening the field to generic alternatives.

Patent expirations will continue to drive the growth of generics in the coming year. An estimated 37 drugs came to the end of their exclusivity periods in 2020 – or soon will in 2021 – opening the field to generic alternatives.

Major names on the list include the HIV drug Truvada, which came of age at the end of September, but is holding on for at least another year.

2020 also saw the expirations of Afinitor, Chantix, NuvaRing, and Forteo, to name just a few. In 2021, six drugs will lose patent protection in February alone. In order of appearance, they include Feraheme, Fortical, Crixivan, Prevantics Maxi Swabstick, Cysview Kit, and Northera. No doubt there will be challenges and stalling tactics to preserve the most profitable pharma cash cows, but these efforts will only serve to delay the inevitable.

Nitrosamines – A Timeline

Here’s an infographic detailing some of the history of nitroso compound contaminants. Nitrosamine, a probable human carcinogen, continues to make the news as the FDA, EMA and other regulatory agencies have taken action on their presence in human drugs. While nitrosamines have long been a known issue in the food, beverage and consumer products industries, their recent detection in various medicines is concerning.

Update on Regulatory Guidance for Facility Inspections

The basic principle of pharmaceutical quality assurance is that a drug should be safe and effective for its intended use – and process validation plays a pivotal role in ensuring a drug’s quality.During the initial outbreak of the COVID-19 pandemic, travel and social distancing restrictions had a significant impact on regulatory inspections. In March of 2020, hands-off policies quickly became the new normal for both the US and the UK. Inspections, when not delayed altogether, were largely conducted via Zoom, via documentation or by other remote means in the months that followed.

While industry stakeholders and regulators alike stepped up to handle these challenges, pressure to resume on-site inspections grew steadily.

By August, both the FDA and MHRA released temporary interim guidelines for the industry that included resumption of on-site inspections. Here’s a quick rundown of eight common questions on where things stand today.

1. Have industry regulators gone back to business as usual?

The short answer is no. COVID-19 remains an ongoing global health emergency. Protecting the health of both pharma industry workers and inspectors alike is still a critical concern, as is the need to keep supply chains moving smoothly, minimize drug shortages, and ensure ongoing support for response efforts to the pandemic.

That being said, some travel restrictions have been relaxed, while precautions like personal protective equipment (PPE) and social distancing measures have been implemented across the industry. As a result, regulators in major markets like the US and the UK began reevaluating and prioritizing the resumption of activities that were delayed, reduced, or modified when the public health emergency was first declared –  including on-site inspections.

Many regulators have indicated their willingness to adopt flexible assessment submission strategies and practices, and some of the guidance that has been submitted is considered to be nonbinding recommendations rather than requirements. Yet many have also made statements reserving the right to enforce their authority if deemed necessary, as well as determining the priority of inspections and applications.

2. How are inspections being handled now?

Government agencies are working to resume their public health duties as much as possible, within the constraints of current government guidelines and while ensuring the safety of workers and inspectors. To help reduce risk, both the FDA and the MHRA will continue to perform many of the tasks typically associated with on-site inspections using other tools and approaches.

In the US, for example, the FDA may choose to handle pre-approval inspections by requesting existing inspection reports from other trusted foreign regulatory partners through mutual recognition and confidentiality agreements, requesting information from applicants, or requesting records and other information directly from facilities and other inspected entities. The MHRA is requesting as much documentation as possible in advance and has expressed its willingness to review information remotely where possible.

While regulators reserve the right to perform unannounced inspections, most domestic businesses that will receive on-site visits are being notified in advance for the foreseeable future. This process:

  • allows time for both parties to plan and coordinate aspects of the inspection (such as what information can be shared remotely).
  • helps to ensure safety by allowing businesses to provide the safest possible environment for the inspection
  • ensures that all appropriate staff members are present (in person or remotely) to assist the inspectors.

3. Are regulators taking local infection levels into account?

The FDA is using its COVID-19 Advisory Rating system to determine what types of regulatory activity can take place in any given region. Certain rating levels restrict its activities to “mission-critical” inspections.

A variety of factors determine what is deemed “mission-critical,” and these are evaluated on a case-by-case basis. Considerations include, but are not limited to, whether the products have received breakthrough therapy designation or regenerative medicine advanced therapy designation, or are products used to diagnose, treat, or prevent a serious disease or medical condition for which there is no other appropriate substitute. Both for-cause and pre-approval inspections can be deemed mission-critical.

In safer geographic regions, the FDA has resumed prioritized domestic inspections, which generally include pre-approval and surveillance inspections.

In addition, the FDA has explicitly stated that it will continue to consider applications even if they reference a facility located in a region impacted by COVID-19 travel restrictions.

4. How should I prepare for an on-site inspection?

This will vary depending on your location, but be prepared to assume much of the responsibility for maintaining social distancing and other safety measures.

The MHRA, for example, encourages organizations to minimize the number of in-person staff present at opening and closing meetings or during facility tours. Inspectors may choose to conduct some meetings with subject matter experts and other personnel via videoconference, even if those personnel are in the same building.

If you anticipate any difficulties, be sure to discuss them with the inspection team ahead of time.

5. Is the FDA resuming foreign inspections?

As of this writing, foreign pre-approval and for-cause inspection assignments that aren’t considered mission-critical (defined by the same criteria as domestic inspections) remain temporarily postponed. Those deemed mission-critical may still be considered for inspection on a case-by-case basis.

6. How is the FDA ensuring the quality of imported products while inspections are limited?

For manufacturing facilities, the FDA is temporarily expanding the use of other tools and approaches, including:

  • Physical examinations of products arriving at U.S. borders
  • Product sampling and testing before release into commerce
  • Reviewing the compliance histories of facilities
  • Using information shared by trusted foreign regulatory partners through mutual recognition and confidentiality agreements
  • Requesting records directly from facilities “in advance of or in lieu of” certain drug inspections

If a product appears not to meet applicable standards for safety, effectiveness, or quality based on these approaches, the FDA has the authority to refuse admission of the product into the United States.

7. How are limited inspections affecting applications, especially if they include sites that can’t be inspected because of travel restrictions?

As with other inspection activities, regulators are exploring alternatives to determine whether an inspection is necessary and to support the application assessment. The FDA, for example, may consider a firm’s previous compliance history, use information sharing from trusted foreign regulatory partners through mutual recognition and confidentiality agreements, or request records “in advance of or in lieu of” facility inspections.

Applications will not automatically receive a complete response letter if the FDA can’t conduct an inspection. The FDA is informing applicants as soon as possible if an inspection is deemed necessary but can’t be conducted during the review cycle (e.g. because of travel restrictions). If there isn’t enough information to make a determination on the acceptability of a facility, the FDA may defer action on the application until an inspection can be completed.

8. Can a facility be added or changed in an FDA application if COVID-19 is causing supply chain disruptions?

Yes, but only if your drug application relates to the treatment or prevention of COVID-19, or to a drug on the FDA’s drug shortage list. In such cases, the cover letter to your submission should clearly state “Priority Review Requested” and include supporting information.

If you need to make manufacturing process or facility changes to address disruptions, you should refer to the agency’s most current guidance documents on making changes to an approved abbreviated new drug application (ANDA), new drug application (NDA), as well as scale-up and post-approval change guidance documents.


Because Neuland Labs serves pharma companies in the U.K, EU, and in the U.S., we stay up to date on regulatory changes throughout the world.


The Impact of Impurities on the Pharmaceutical Industry

The Impact of Impurities on the Pharmaceutical Industry

A significant paradigm shift is underway in the regulatory environment for impurities in pharmaceutical products. Recent incidents involving genotoxic impurities (GTIs) are driving tighter restrictions and guidelines, as well as more stringent process standards.

As we’ve discussed in previous posts, the discovery of contamination in generic valsartan – despite the scrupulous care of the manufacturer – was a frightening wake-up call that highlighted significant risks to the industry. The impurity had gone undetected for years, demonstrating the need to not only assure the quality of pharmaceutical ingredients, but also the safety of chemical synthesis processes.

This was just one of several recent incidents involving GTIs. Similar cases included the discovery of ethyl mesylate contamination at a Roche plant in Switzerland and EE impurities in the manufacture of Terbinafine. The incidents and others underscored the need for the industry to reevaluate long-standing best practices and safety procedures.

Understanding Drug Impurities
The ICH broadly classifies impurities in one of three groups:

  1. Organic impurities: starting materials, process-related, intermediates, degradation products and formulation-related impurities
  2. Inorganic impurities: salts, catalysts, ligands, and heavy metals or other residual metals like Pd, Pt, Ni, Cu, Fe.
  3. Residual solvents: organic and inorganic liquids used during production.

According to the International Council for Harmonization (ICH), “(G)enotoxic impurities can be broadly defined as impurities that have been demonstrated to cause deleterious changes in the genetic material regardless of the mechanism.” The negative impacts of GTIs may include:

  • Mutagenesis: the formation of mutations
  • Carcinogenesis: the formation of cancers
  • Teratogenesis: damage to the DNA.

Regulators are Cracking Down
In the past, it was sufficient simply to characterize the final product and any associated impurities. In the wake of these incidents, however, regulatory agencies have made significant moves to reduce toxicity risks. Here are just a few of the changes we’ve seen in recent years:

  • The International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) guideline M7 requires all impurities that have been identified to be considered for their mutagenic potential.
  • Effective January 2018, Chapter <231> of the United States Pharmacopeia’s (USP) National Formulary (NF) was replaced by Chapters <232> and <233>. These changes eliminated the traditional “Heavy Metals Test,” which had been an industry standard for more than a century. The new regulations made significant changes to toxicity limits and to the standards for analytical procedures. Notably, toxic substances like lead, mercury, arsenic, and cadmium; as well as metals like platinum, palladium, ruthenium, rhodium, and rubidium; must now be tested and controlled for — even if they are not used in any process.
  • In addition, exhaustive GTI assessments and control strategies must now be demonstrated for all products and processes.

Analytical Challenges
These evolving standards have required API manufacturers to adopt more expensive and cumbersome development and validation strategies.

Why? Because unlike typical contaminants, which can be present in 1000, 100, or 10 parts per million (ppm), new toxicity limitations mandate the detection of impurities as low as 1 ppm.

Requiring this level of accuracy knocks a lot of standard lab equipment out of the process. Depending on the nature and quantity of the impurity under investigation, one or more advanced, specialized, and costly techniques may be required, from liquid chromatography–mass spectrometry (LC–MS) to gas chromatography–mass spectrometry (GC–MS) or inductively coupled plasma mass spectrometry (ICP–MS).

Manufacturing Process Challenges
Evolving standards also present new hurdles and concerns at every stage of the manufacturing process. These include:

  • Identification of potential impurities throughout the entire route of synthesis, possible byproducts, degradations, etc.
  • Redesigning the route of synthesis to eliminate possible GTIs, or to reduce their levels within the scope of the regulatory landscape to acceptable levels of safety and cost.
  • Synthesis of all potential impurities and GTIs, their characterization, spiking, and purge studies.
  • Development and validation of suitable analytical methods.
  • (Q)SAR (quantitative structure–activity relationship) models, in vitro — and sometimes in vivo — evaluation if required to avoid ambiguity.
  • Deployment of additional resources, time, cost and effort.
  • Possible delays in regulatory approval.

Early Successes with New Solutions
API manufacturers and their partners are working hard to meet these new challenges. In one recent case, a Neuland client’s final API process involved the neutralization of salt with a sodium hydroxide solution. In a related substances test, high performance liquid chromatography (HPLC) detected an unknown impurity at a level of 0.14%.

To identify the impurity, we used LC–MS. The mass didn’t match any possible structure we could think of that was present in the starting materials, reagents, intermediates or their possible successive structures.

Subsequently, this impurity was isolated with preparative HPLC. Our investigation of the structure deduced from the isolated material found that it was formed with dichloromethane and acetone in the presence of a strong base. The isolated impurity was spiked with original material to re-confirm it by HPLC, then characterized by nuclear magnetic resonance (NMR) and mass spectrometry. Our hypothesis was further confirmed by lab experimentation.

In another recent case, an unknown impurity — which hadn’t been noticed during the entire development cycle — was detected during process validation. LC–MS analysis revealed an ester hydrolysed product.

Further investigation found that an accidental ammonia leak had occurred during unloading in an adjacent block. The impurity was duplicated in the lab by simulating similar conditions and confirmed by generating structural data and a spiking study.

The Way Forward
Ensuring safe and compliant products and processes will require the industry to take a number of new steps and precautions. We recommend the following practices to minimize your risk:

  • Avoid genotoxic reagents or their possible generation by design.
  • Allocate the best possible scientists and provide adequate resources for the detection of GTIs. Create a stand-alone cell for this activity.
  • Identify all potential structural alerts from the review of systems (ROS) and design a control strategy. Be aware that even this may not ensure “query free” approvals.
  • If possible, implement the highest possible levels of impurity control at an intermediate stage, rather that at the API/NCE stage.
  • Generate in vitro/in vivo safety data wherever it is difficult to control GTIs or where limits are on the borderline.

Genotoxic Impurities – Raising the Stakes for APIs
The need for greater attention to GTIs has raised the stakes for the entire API community. We’ve already seen multiple cases where impurities have required products to be withdrawn from the market — sometimes in lots or batches, and sometimes forever.

Even when GTIs can be eliminated by adapting a process, manufacturers may need to make considerable unplanned investments and endure time-consuming requalification before a product can be returned to market. Moreover, failure to detect, investigate, and provide corrective and preventive actions for GTIs also increases the risk of critical regulatory attention, such as the FDA’s 483 observations.

As a result, we’re already seeing major investments and manpower deployments in this area, and we anticipate many more. Tightening regulations mean big business for instrumentation companies, especially the makers of LC–MS and ICP–MS equipment. They’re also creating business opportunities for organizations capable of creating new standards and processes for detecting impurities in manufacturing and production.

Maintaining Quality and Supply During COVID-19

The need for API manufacturers to establish strong quality systems and plan for business continuity has never been greater than it is today. And you can probably guess the reason why.  Following on the heels of SARS, Ebola, swine flu and other emerging pathogen threats we’ve seen in recent years, COVID-19 represents the bullet we didn’t dodge. The need for API manufacturers to establish strong quality systems and plan for business continuity has never been greater than it is today. And you can probably guess the reason why.

Following on the heels of SARS, Ebola, swine flu and other emerging pathogen threats we’ve seen in recent years, COVID-19 represents the bullet we didn’t dodge. It’s a global crisis that has been decades in the making.

Experts have been pointing to the warning signs for years: climate change, urbanization, increased population density in proximity to farm or forest animals, the spread of microbes accelerated by war, the global economy, international air travel, and more.

In addition, institutions like the World Health Organization (WHO), World Bank, and the Global Preparedness Monitoring Board have been issuing warnings about the risks of pandemics for decades. The Worldwide Threat Assessment published each year by the US intelligence community has been highlighting the vulnerability of the United States — and the world — to a potential pandemic since 2017.

Meeting the Challenges of the “New Normal”
When we’re finally able to see COVID-19 in our rearview mirror, there will be plenty of finger-pointing, for good and ill. In the meantime, the world is adapting to this new reality.

From our standpoint as an API manufacturer for the pharma industry, the changes have occurred in rapid-fire. Supply chain hiccups, followed by curtailed regulatory activities, followed by a further increase in trade nationalism around the globe, combined with the search across drug portfolios for anything that might offer hope in the fight against SARS-CoV-2 — all of these challenges arose over a short six months.

To their credit, the pharmaceutical and biopharma industries have risen to the challenge, despite having fewer staff and resources to work with during the crisis.

As travel restrictions and social distancing needs took hold, regulators have taken a hands-off approach, cancelling the usual inspections in order to protect the health and safety of both inspectors and pharma workers. In response, companies are stepping up to maintain quality control and worker safety. A variety of digital tools have been implemented quickly, including virtual audits and inspections.

The API manufacturing industry was also fortunate to have strong health and sanitation practices already in place when the pandemic broke out. These have since been bolstered by new practices, including daily employee health screenings, increased sanitation and hygiene requirements, limiting unnecessary visitors, requiring masks and other PPE equipment. Social distancing is enforced throughout the industry and remote work encouraged when possible. Many companies turned to the World Health Organization, US Centers for Disease Control and Prevention, and other health institutions worldwide for guidance, and some added additional safeguards of their own.

Securing Supply Chains
A key priority for maintaining quality is keeping global supply chains running smoothly. Manufacturers stay in constant contact with suppliers, replacing face-to-face communication with video meetings and other digital technologies. Many also moved quickly to diversify and strengthen supply chains in order to minimize potential disruptions.

India, which manufactures about a third of all medications and 70 to 80 percent of generics, is a case in point. The country could potentially face supply shortages and price increases in the event of an extended shutdown. According to a report by HDFC Securities, however, there is limited immediate risk. Most companies are maintaining an inventory of 3–4 months and are closely monitoring the situation.

For the longer term, India’s government announced new incentives in July to boost domestic manufacturing of active pharmaceutical ingredients (API) and key starting materials (KSM). According to Fitch Ratings, this initiative could improve backward integration over the next few years and curtail supply-chain disruption risk for Indian drug makers.

What the Future Holds
In the years to come, we will undoubtedly see focus on more robust preparedness. Supply chains, in particular, are already becoming more diverse in an effort to minimize reliance on a single source of raw materials. Companies willing to take these precautions now are likely to realize dividends quickly in the event of a future health crisis, geopolitical tensions, or other disruptions.

One of the outcomes of the COVID-19 crisis has been an accelerated adoption of new tools by the pharma industry. One of the outcomes of the COVID-19 crisis has been an accelerated adoption of new tools by the pharma industry.

The sudden need for collaboration and information sharing platforms materialized to make use of the newest technologies – allowing companies to maintain quality, make and track orders, and get support quickly from suppliers, despite social distancing and travel restrictions.

These (and other) technologies will continue to enhance the speed and efficiency of the industry long after the pandemic era has ended.

The Need for Speed: Drug Development, Trials & Regulatory Pathways Accelerate in the Wake of COVID-19

For drug makers, speed has always mattered. Every day a drug is delayed on the path to market costs pharma companies millions of dollars. Delays can also lead to the loss of exclusivity, or the need for contentious reverse payment settlements.

A 2017 report found that “the clinical development duration of a trial was a key factor in driving up its cost, and found that each additional month in a Phase III trial added a median expense of $671,000.”

From discovery to market, a drug typically travels a 10+ year path – at a cost of about U.S. $2.6 billion. That cost, however, is highly dependent on the length of clinical development. Some drug companies are reported to perform better than others, with those better-performers bringing a drug to market for approximately $2 billion while many other companies report a $5-8 billion price tag.

An interesting study published in Cancer Med in 2018 (The importance of greater speed in drug development for advanced malignancies) shed light on this very issue.

“It takes on average 6–12 years to develop new anticancer drugs from discovery to approval…For every year by which time to drug approval could have been shortened, there would have been a median number of life‐years potentially saved of 79,920 worldwide per drug. Median number of life‐years lost between time of drug discovery and approval was 1,020,900 per example. If we were able to use available opportunities to decrease the time required to take a drug from discovery to approval to 5 years, the median number of life‐years saved per example would have been 523,890 worldwide.”

Maximizing Speed Through Industry Technologies
Some of the most important industry technologies have focused on maximizing speed and productivity, though virtually all have only led to incremental improvements. Our ability to rapidly discover new therapeutic molecules via high-throughput screening, our ability to manufacture those molecules efficiently via route scouting & optimization, or our ability to recruit and manage massive clinical trials are all examples.

This is tempered by the fact that both drug compounds and the protocols for their clinical trials are growing more complex. Clinical trials have become more difficult to perform, tend to run longer and demand more robust domain expertise.

Speed and the Public Eye
To the average layperson, the ‘speed’ of the drug industry has always seemed unhurried and sluggish. The industry doesn’t appear to move quickly…or sometimes at all. When we read of a new discovery that promises a cure for a debilitating disease, excitement builds. The process of translating a discovery published in a peer-reviewed journal to a finished, approved and marketed drug, however, stretches years…and in some cases even decades – if it can be translated into a finished therapeutic at all. When a drug finally reaches the market, it isn’t uncommon for people to wonder: “Wait, didn’t we cure that years ago?”

That gap between scientific discovery and marketed treatments has always existed, and it is the very reason the drug industry has focused so keenly on shortening that gap. Health conditions rarely wait for the science to catch up, and time is money, after all. The faster a product can be brought successfully to market, the better it is for patients, for medical practitioners and for the scientific and drug development communities.

COVID-19 has – without a doubt – changed everything. While people anxiously awaiting a vaccine may protest the delays in vaccine (or treatment) development, the science is moving at near-lightning speed these days.COVID-19 has – without a doubt – changed everything. While people anxiously awaiting a vaccine may protest the delays in vaccine (or treatment) development, the science is moving at near-lightning speed these days.

The Impact of 2020
Dr. Hank Fuchs, President of Worldwide R&D at BioMarin Pharmaceuticals, has discussed how game-changing therapeutics can experience accelerated and condensed development: “We work with devastating pediatric diseases for which there are no current therapies. That puts a lot of spring in everything and can really catalyze a program.”

While the compound Dr. Fuchs mentioned targets a rare disease (which enjoys accelerated FDA timelines), COVID-19 is anything but rare. With tens of millions of cases worldwide – and a death toll (as of this writing) approaching 10 million, treatments and vaccines for COVID-19 are forging a new path.

The Year 2020 will likely be remembered (among many, many other things) as the year when the global pharma industry teamed with governments, health regulators, research organizations and NGOs to expedite the funding, development, testing and commercial manufacturing of therapeutics and vaccines targeting a single disease.

The effort is truly something we’ve never seen before. Consider:

  • The WHO reports there are 536 clinical studies to develop post-infection therapies for COVID‑19 infections.
  • The FDA reports there are 570+ drug development programs in the planning phase, and 270+ clinical trials have already been reviewed (as of July 31, 2020).
  • The last several years have seen a number of initiatives created in order to stimulate vaccine and antiviral drug development. These include the E.U.’s Innovative Medicines Initiative, the and the U.S.’s Critical Path Initiative, in addition to the new Breakthrough Therapy designation. These are proving essential to accelerating the path for COVID-19 treatments and vaccines.
  • An unprecedented amount of supercomputing and Cloud computing power has been focused on COVID-19 drug discovery, tapping the capabilities of IBM, HP, Amazon, Microsoft, and Google.

Obviously, the efforts to contain SARS-CoV-2 and ultimately eliminate COVID-19 as a health risk stretch well beyond these few bullets. It is an exciting and unparalleled concentration of resources – never before witnessed as an industry. It is a global effort that holds the hope that our lives can – hopefully sooner rather than later – return to some semblance of normal.