Highlighting the seven key trends in global pharma that drove discussion at this year's CPhI Worldwide event in Spain.
Innovation in biopharmaceuticals occurs in many settings. One of the most prominent venues is the annual CPhI trade show organized by Pharm Exec’s parent company, UBM, took place in October in Barcelona. A CEO panel of
experts prepared a well-resourced document, Prospects, Analysis and Trends in Global Pharma 2016, which consolidates key themes behind this year’s event. The following is a brief summary of conclusions.
Quality culture-methods and mindset count. In many areas of regulation, industry follows a “check-the-box” approach rather than observing the principle that regulation sets minimal requirements-the aim must be to exceed the norm. Management often fails to see that inconsistent, erratic “human behaviors” can derail even the best-designed internal quality and safety program; regulators need to introduce metrics that drive on-the-ground operational excellence rather than relying on “lagging indicators” that measure symptoms, not cause. Another performance issue is less innovation in excipients, a critical adjunct to safety and quality in manufacturing.
Generic geographies. While generics face punishing competition in the US and Europe, there are opportunities in emerging country markets due to higher insurance coverage and a rising middle class. Generics are finally making inroads in Japan too. A bright spot in the US is a return of the patent cliff, with $105 billion in revenues exposed to LOE in the next four years, compared to $87 billion from 2011-2015. A segment characterized by low margins also demands additional support from regulators on the global harmonization of standards, where compliance has become increasingly expensive. And a flexible, adaptive business model on generics is required to thwart the push to commoditization.
CMO spells opportunity. Transformation of service providers will continue apace as the major integrated drug manufacturers seek support in rationalizing their supply chain networks on a global scale. Consolidation within the CMO/CDMO business is overdue-but it’s happening. More CMOs will go public and service providers based in emerging countries will seek to replicate their low-cost service model in the US market. The higher profile of the CMO/CDMO is evidenced in the way national regulators now see them as strategic partners, not just service delivery organizations.
China rising. China is on course toward its goal to be a global biopharma innovator, from local manufacturer of drug formulations to discoverer of new products, first for Chinese patients, and ultimately as the source of world-class innovations with market reach beyond China. China’s innovation aspirations are anchored by a strong base in API production, rivaled only by India. Increased M&A activity among API producers will strengthen the competitive positions of companies with a track record on data integrity and quality. But there remain some clouds on the horizon, led by the affordability of novel drugs for Chinese patients and lack of investor confidence in a predictable regulatory pathway, from drug discovery to commercialization and launch.
Bump up for biosimilars. The innovative sprint to biologics makes growth of biosimilars all but inevitable, particularly in emerging countries but equally in the US. India now has 25 companies marketing nearly 50 such products, domestically and worldwide. Not only are biosimilars viewed as a therapeutic novelty-they are also necessary, due to the projected saving for cash-strapped health systems in the US and Europe of more than €50 billion over the next five years. Convergence of regulatory standards is still too slow, but a bright spot is national regulators’ increasing acceptance of data extrapolation, which allows a biosimilar to be approved for multiple indications without undergoing additional clinical testing. What is industry NOT doing? Stakeholder education-greater outreach is needed.
Potential in potency. A key growth market is high potency APIs geared to treating cancers, autoimmune disorders and other complex conditions. Higher potency brings benefits to patients, including lower dosing, longer efficacy and fewer side-effects. Global sales of these products are projected to double within the decade, to $25 billion in 2023, but progress depends on an approved regulatory framework for classifying a high potency API in manufacturing-a crucial step in reducing any safety risks.
A 3D future? Technology will continue to streamline manufacturing costs, with advances that allow for cheaper, personalized, designed-in variations to accommodate everything from a small-batch contribution of a drug for a clinical trial to mass quantities of drugs for chronic conditions. The next step toward this new dimension of a personalized medicine supply chain is fabrication of complex specialty drugs through the 3D printing of living tissue.
What’s the sum-up here? Because biopharma business decisions are heavily shaped by regulation, such regulation must be partnered, proactive, forward-looking and wise to both its benefits and limitations. On that depends the future-especially for patients.