SOURCING QUALITY APIAPRIL17, 2014
LUDIVINE PENNANEACHSOLUTION SPECIALIST
AGENDA
• Generics & API Intelligence at Thomson Reuters
• An overview of the Russian market
• Global API manufacturing landscape
• A look into the Indian & Chinese API manufacturing industry
• Are second wave emerging markets becoming a potential
sourcing destination?
• European sources
• Future trends
• Case study : Using Newport to find quality sources of API &
target products matching your strategy
2Source: Thomson Reuters Newport Research Team 2013
GENERIC & API INTELLIGENCE AT THOMSON REUTERS
• 20 years of expertise in global generics
• Unique research that tracks global generic API development
and manufacturing activities
• Intelligence appears in the Newport ™ database, used by
professionals in:
– Strategy, Planning and Product Targeting
– Business Development & Licensing
– Competitive & Business Intelligence
– API Sourcing
– Patents & Intellectual Property
• Serves 300 customers operating in over 40 countries
• Team based in Portland, Maine, USA
Source: Thomson Reuters Newport Research Team 2013 3
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AN OVERVIEW OF THE RUSSIAN MARKET
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THE RUSSIA MARKET
Opportunities• One of the fastest growing
markets in the world
• Pharma 2020 plan to focus on
bringing 50% of API production
back to Russia
• Drug Reimbursement Initiatives
will promote generic medicines
& API production
• Increase in licensing
agreements, which will boost
deals & investment into
infrastructure for API
production
• Cost efficient clinical trials &
contract research opportunities
Challenges
• Patent and IP protection
(should be alleviated with
Russia’s entry into WTO last
year)
• Region based differences on
what medications qualify for
reimbursement on the
ZHNVLP (or Essential Drug
List) along with the DLO List
• 90% of substances used in
pharmaceutical production are
imported
5
API MANUFACTURING
• Very limited local API manufacturing
– Only 43 Russian-owned groups involved with API manufacturing
– No manufacturing sites inspected by US FDA
• No local API manufacturing by regulated market players yet
– ICN – Kursk owned by Millhouse Capital (UK)
– 4 COS
– 1 held by Biosintez Kombinat for fusidate sodium
– 3 held by Pocard Ltd for immune globulin intravenous (ovine) and ovine
polyclonal antibodies against human low density lipoproteins
• Gaps in technology
– Everything except certain biologics
6Source: Newport Premium™ for Generics, TR Research 2014
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GLOBAL API MANUFACTURING LANDSCAPE
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GLOBAL API MANUFACTURERS LANDSCAPE
Established: companies with years of experience supplying highly regulated markets
Less Established: companies with less of a track record in supplying regulated markets in terms of the length
of their history or number of products supplied
Potential Future: companies with little or no known experience but have aspirations to become involved in
regulated markets
Local: companies with no record, capability or interest in supplying to regulated markets
Experience in supplying
regulated markets
8Source: Newport Premium™ for Generics, TR Research 2014
REGIONAL HUBS – API MANUFACTURING
Source: Newport Premium™ for Generics, TR Research 2014 9
Over 1/4 of the 400+ experienced manufacturers are in India
and China
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A LOOK INTO THE INDIAN & CHINESE API MANUFACTURING INDUSTRY
API MANUFACTURERS INDIA, CHINA & ROW
11Source: Newport Premium™ for Generics, TR Research 2014
EVOLUTION OF INDIAN & CHINESE API MANUFACTURING RATINGS (2006 Vs 2013)
Source: Newport Premium™ for Generics, TR Research 2014 12
India China
2006 2013
REGULATORY FILLINGSUS DMF
Source: Thomson Reuters Newport Research Team 2014 13
REGULATORY FILLINGSCERTIFICATE OF SUITABILITY
Source: Thomson Reuters Newport Research Team 2014 14
US FDA INSPECTION
Source: Thomson Reuters Newport Research Team 2014 15
DRIVERS & CHALLENGES IN INDIA
Drivers
• Cost advantage
• Capital efficiency
− Up-front costs 25-50% less due to
local labor, materials & equipment
− Improved process engineering
drives down costs
• Rich talent Pool
– 125,00 chemical engineers &
25,000 pharmacists graduate each
year
• Capacity increasing annually
– 2000-2004 tripled
– 2nd & 3rd tier companies are now
investing & reaching into regulated
markets
• FDA approved facilities only
eclipsed by the USA
Challenges
• Poor infrastructure
− Power supply, highway system
• Energy cost
• IP theft due to high mobility of
staff between companies
• Increasing reliance on China for
raw materials, intermediates,
base chemicals
• Gap in technology
– Fermentation, steroids, narcotics
• Quality issues
Source: Newport Premium™ for Generics, TR Research 2014 16
DRIVERS & CHALLENGES IN CHINA
Drivers
• Talented pool of scientists &
engineers
• Lower cost base & economies of
scale
• Scale of infrastructure
• Improving IP & anti-
counterfeiting environment
• Newly revised GMP regulations
• Leadership (cost &/or technical)
in certain product classes :
intermediates, base chemicals,
fermentation-based APIs,
steroids
• Government support for API
export to regulated markets
Challenges
• Environmental costs &
increasing prices
• Risk of technology theft
• Compliance issues– Ongoing training needed to ensure
adherence to SOPs & GMPs
– High turnover rate for qualified and
experienced QA/QC staff
– Lack of an effective QA program
among big groups
• Language barrier
• Limited long-term strategic
planning– Focus on quick targets rather than
sustainable profits
• Limited experience with
supporting patent challenges
Source: Newport Premium™ for Generics, TR Research 2014 17
COST COMPARISON
Cost Type China India Europe US
Labor $ $ $$$ $$$
Environmental $$$ $ $ $
Energy $$ $$ $ $
IP Protection $$ $$ $$ $$
cGMP
Monitoring$$$ $$ $ $
18Source: Newport Premium™ for Generics, TR Research 2014
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ARE SECOND WAVE EMERGING MARKETS BECOMING A POTENTIAL SOURCING DESTINATION?
API MANUFACTURING IN SECOND WAVE EMERGING MARKETS
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India
China
Emerging
Markets
Esta
blis
hed
Less E
sta
blis
hed
Po
ten
tia
l F
utu
re
Local
Source: Newport Premium™ for Generics, TR Research 2013
API MANUFACTURERS IN EMERGING MARKETS
21
0
10
20
30
40
50
60
70
80
90A
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nti
na
Bra
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So
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ica
So
uth
Ko
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Ta
iwan
Th
ail
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d
Ukra
ine
Local Potential Future Less Established Established
Source: Newport Premium™ for Generics, TR Research 2014
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EUROPEAN SOURCES
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EUROPE
Drivers
• Quality issues in sources from
India/China
• Long standing relationships
• Strong capabilities in niche
manufacturing (peptides,
controlled substances etc...)
• Indian companies purchasing
EU made API– Approved for FD products bound
for regulated markets
• Secure intellectual property
environment
Sustainability
• Partnership– Developing processes in EU,
manufacturing in India
– Strategic relationships for
advanced intermediates from
China
• EGA proposed regulations to
allow stockpiling & export to
countries with less IPR
• Advantage in specialist driven
APIs– Continued investment into
manufacturing processes
• Legislative measure– cGMP advanced intermediates
– Falsified Medicines Directive
23Source: Newport Premium™ for Generics, TR Research 2013
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FUTURE PROSPECTS
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FUTURE PROSPECTS - INDIA
• Greater reliance on China for APIs & advanced intermediates
• Increased costs as Chinese materials become most
expensive & salaries rise
• Increased investment into local market
• Continued emphasis on large batch production
• Expansion into pharmemerging markets through partnerships
25Source: Newport Premium™ for Generics, TR Research 2014
FUTURE PROSPECTS - CHINA
• Continued emphasis on large batch production
• Additional companies will expand into finished dose for
regulated markets
• Impact of new GMP regulations
• Greater EHS, waste water treatment enforcement
• Increased costs of labor and raw materials
• Improvements in quality, technical packages, IP
• Many companies will stay focused on local market
• Increased partnerships with Western companies seeking
access to the growing Chinese market
26Source: Newport Premium™ for Generics, TR Research 2013
FUTURE PROSPECTS - EUROPE
• Continued investment in process improvement & niche
product manufacturing
• Little incentive for manufacturing to move into second wave
emerging markets
• Continued raw material pricing pressures from China
• Increased focus on quality and reliability
Source: Newport Premium™ for Generics, TR Research 2014 27
API MANUFACTURERS INVESTING IN SPECIALISED CAPABILITIES• High Potency APIs (HPAPI)
– Requires specialized equipment for containment, operator
training and safety practices
– Lucrative targets for API manufacturers
• Continuous Process & Separation
– Reduction of waste streams
– More Asian companies investing in micro-reactor technology
• Micronization
– Improves formulation and dissolution properties
– Better bioavailability, less API needed
• Quality by Design (QbD)
– Increasing importance to regulatory bodies
– Aims to lower production costs
Source: Newport Premium™ for Generics, TR Research 2014 28
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CASE STUDY :
USING NEWPORT TO FIND QUALITY SOURCES OF API
USING NEWPORT TO TARGET PRODUCTS MATCHING YOUR STRATEGY
29
EXAMPLE: ROSUVASTATIN CALCIUMMANUFACTURERS IDENTIFY 1/2
30Source: Newport Premium ™ for Generics, TR Research 2013
EXAMPLE: ROSUVASTATIN CALCIUMMANUFACTURERS IDENTIFY 2/2
Source: Newport Premium ™ for Generics, TR Research 2014 31
EXAMPLE: ROSUVASTATIN CALCIUMUS DMF AVAILABLE
Source: Newport Premium ™ for Generics, TR Research 2014 32
EXAMPLE: ROSUVASTATIN CALCIUMGMP CERTIFICATES
• GMP Certificates: WHO, ANVISA (Brazil), COFEPRIS (Mexico) &
CDSCO (India)
The CDSCO issues GMP certifications for products bound for the
European Union in order to comply with the Falsified Medicines
Directive. The certifications are a written confirmation that the API
manufacturer operates under GMP standards equivalent to those in
the EU
Source: Newport Premium ™ for Generics, TR Research 2014 33
BIOCON LTD MANUFACTURER’S CAPABILITIES & REGULATORY INSPECTIONS
• Regulatory inspections from US FDA, WHO, EMA, Australia TGA,
Canada TPP, German BfArM & UK MHRA
Source: Newport Premium ™ for Generics, TR Research 2014 34
BIOCON LTS MANUFACTURING PROFILE
Source: Newport Premium ™ for Generics, TR Research 2014 35
EXAMPLE: ROSUVASTATIN CALCIUM PARAGRAPH IV CHALLENGE
Source: Newport Premium™ for Generics, TR Research 2014 36
USING THE TARGET API COMPANIES TO FIND MANUFACTURERS
• Combine your criteria to find the manufacturers that match
your requirements
Source: Thomson Reuters Newport™, Target API Companies Search – April 2014 37
API COMPANIES THAT MATCH YOUR SEARCH
Source: Thomson Reuters Newport™, Target API Companies Search – December 2014 38
USING NEWPORT™ TO TARGET PRODUCTS MATCHING YOUR STRATEGY
Source: Newport Premium™ for Generics, Target Product Search - April 2014 39
Growth >
5% EU
Top 5
Launched
in UK & not
in Russia
Oral
81
Ludivine Pennaneach
Solution Specialist
O +33 (0)1 53 06 20 33
M +33 (0)6 87 60 31 56
Elena Buraeva
Account Manager, Intellectual Property & Science
O +7 495 961 01 00, ext.: 173
M +7 915 267 74 21
THANK YOU, QUESTIONS?
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