Looking for an API Supplier? 5 Things to Consider (Updated)

Seven years ago – in March of 2013 – we published a blog post on 5 Things to Consider When Looking for an API Supplier. Because seven human years equals 100+ years in the pharma industry, we thought we’d revisit the topic now that the slight supply chain uncertainty some pharma execs were beginning to feel has grown and developed into a full-on global panic.

First of all – there is no need to panic! Everyone – and, full disclosure, this includes us – has been writing about the imminent supply chain crisis. Except, it isn’t quite a crisis, and very little (aside from recalls) happens ‘imminently’ in the drug industry. In fact, de-risking supply chains is nothing new, though in 2020 it seems to have risen to the top of pharma’s to-do list.

It is true there has been a shift in thinking – brought on first by quality issues, then by unexpected facility shutdowns, followed by increasing global trade nationalism, and finally capped off with a global pandemic that briefly impacted some supply chains.

No doubt, it has been a rough 7 years for globalism. Concern crept into the C-suite early in the period, but that has now officially been replaced by full-on ‘trade terror.’

No one – and nowhere – is immune: US-based companies, European firms, Japanese drugmakers and Indian manufacturers have all begun to re-evaluate the length and breadth of supply chains to identify (and hopefully begin the process of mitigating) risk. What is new is that governments have begun stepping into the fray, seeking ways to strengthen domestic production of key essential drugs and drug APIs which are most at risk.

The original post focused on 5 broad areas to consider when selecting an API supplier:

1. Technical Capabilities
2. Regulatory Capabilities
3. Scalability
4. Capacity
5. Customer Relations

In our update to the earlier post (below), we have grouped the CMC-related categories of scalability & capacity together in order to make room for the once-emerging-but-now-absolutely-dominant factor: Supply Chain De-Risking.

Outsourcing production of APIs provides pharmaceutical and biotech companies the benefit of API scale-up and production expertise while allowing them to focus on their core business – the research and development of drugs.

With any successful business relationship, a great deal rests on the proper upfront due diligence. It is critical to choose an API supplier that can meet a whole host of important qualifications, from experience at various scales of production and available capacity to worldwide regulatory approvals and support as well as quality systems that mirror (or best) your own.

There are a number of criteria drug manufacturers evaluate when choosing an API supplier. Here are just a few of the key issues your company should be considering when making a decision to outsource API manufacturing.

1. Technical Capabilities
   Your API supplier should be comfortable with your project’s underlying science, and have appropriate development and analytical chemists and labs in-house to support the API in question. Ensure they have the specific capabilities your project may demand – whether it’s analytical chemistry for the detection of genotoxic impurities, route scouting & optimization, process engineering, the development of non-infringing processes, effluent reduction or another discipline necessary to ensure project success.
2. Regulatory Capabilities
   Less than 5% of U.S. FDA Abbreviated New Drug Application (ANDA) applications for generic drugs receive approval. One leading reason why such applications fail is lack of appropriate documentation for an API’s chemistry. These “chemistry deficiencies,” as they are known, can be attributed to a number of factors including: failure to disclose the use of solvents, changes in the manufacturing process, and failure to identify potentially toxic impurities.Avoiding chemistry deficiencies comes with familiarity of regulatory matters. Make sure your partner routinely undergoes inspections from the various regulatory bodies (e.g., FDA or EU GMP) that are critical to your drug’s success. In some cases, ANDAs can be denied because your supplier was unsure exactly how to communicate with a regulatory agency. Remember, an API supplier is only valuable to your firm’s drug candidate if they can execute your project according to the various stringent regulatory criteria you must meet.
3. Scalability & Capacity
   Many contract manufacturers claim capacities from lab to kilo scale. Make sure your manufacturer can actually translate production across multiple scales, and has done it before. Check their track record on DMFs they’ve filed, and similar products they’ve produced. Even if you don’t plan to outsource production long term, your contract manufacturer’s skills and expertise at various scales can prove invaluable during process transfer.Your plan for scaling and manufacturing your drug candidate is only as realistic as the capabilities of your respective partner. Many contract manufacturers have specialties – Neuland, for example, has focused on APIs for nearly 30 years. We are experienced in translating the manufacturing process across a broad range of scales and possess the knowledge of niche chemistry customers expect.Ask if your potential partner has the available capacity for your project – on your timeline. All too often, both scalability and capacity may be available – but not on a timeline that meets your needs.

4. Customer Relations
   Can the API manufacturer provide you with the level of support and involvement your company needs or expects? You want to select an API supplier who believes customers can contribute meaningfully to solutions based on their experience and priorities, and encourages them to participate with clear, open lines of communications. Technology has reached the point where clients can track – in near-real-time – the progress of their project, and online project management systems are one tool that can help increase the integration of international teams based around the globe.

   5. Supply Chain Risk Mitigation
   An API manufacturer should have in place a number of capabilities or solutions to help you de-risk supply chains. There are a number of diverse strategies that can be employed, ranging from ensuring multiple backup manufacturing locations to handle unexpected shutdowns or issues to bringing the manufacture of key APIs, intermediates and precursors in-house to reduce external exposure (backward integration). Your API supplier should be aware of their own supply chain risks, and be able to communicate them clearly to you in order to help you manage risk.

Selecting an API supplier for your drug candidate is about building a partnership. You need to be comfortable with your API manufacturer’s capabilities, capacities, approaches to regulatory matters, and how they will interact with you.

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