Promoting localisation of key inputs and enabling better control on backend supply chain will improve overall reliability.
Patient safety has been the cornerstone of the pharmaceutical ecosystem, and as the technologies to assess long-term impacts of products on human health have evolved, so have the guidelines that assure this safety. At a global level, we see a uniformity in the standards that dictate sourcing, manufacturing and delivering products to the end-consumer.
Pharma is going through a phase of a rediscovery of its operating model. The days of fire-shoot-aim are gone. From pricing pressures driven by acute competition to enhanced expectation on patient safety, players are being tested not only for depth of technical understanding of their products, but also the quality of infrastructure and robustness of processes to ensure they deliver safe and affordable products.
Manufacturers are expected to have full control of the supply chain, all the way from the sourcing of material to the end-consumer. In the interest of patient safety, governing bodies have been adopting clear expectations for risk assessment and quality standards that are process-orientated, rather than just result-orientated. As such, solutions that utilise pure mechanisation or simple automation need a second look and the challenges of running a complicated 24×7 process have redefined the meaning of “self-governance.”
First-time right capability
The evidence of these paradigm shifts, and to some extent lack of understanding of renewed basics across the industry, is visible in the reports published by regulatory agencies. Last year saw a huge increase in the number of warning letters issued by the US FDA, and the lion’s share of those addressed internationally was directed towards India and China. These reflected areas of concern the agency had in the way firms were following certain aspects of good manufacturing practices. The main issues cited (80%) were data integrity violations, including quality and reliability, documentation, manufacturing on shop floor, and the thoroughness with which risk-based events are handled. It all boils down to on-ground implementation of established processes; a mechanism to assess effectiveness through self-discipline and the rigour needed in processes while defining patient safety.
The recent introduction of GDUFA-II (Generic Drug User Fee Amendments) has reformed the product filing process, and approvals are demanding a deeper understanding of product formulation, and more comprehensive dossiers on safety and efficacy. These demands, along with rising competition, are driving the necessity for the first-time right capability, else an unprepared player can easily miss the small window of opportunity.
Outsourcing facility appears to be the farthest from FDA’s rising requirements, having received over 50% of the warning letters for the third fiscal year in a row. Each player in the industry is an important element in an interdependent ecosystem, and any uncertainty in supplies from these partners can send ripples across the global pharma chain. The basic expectation is that the partners follow cGMP standards, or current Good Manufacturing Practice, and embed these principles in the inputs, which then carry on to the finished goods.
Challenges before India
These regulatory challenges are common across every player in the global ecosystem. India, colloquially known as the “pharmacy of the world,” has its own set of challenges. For one, there is a major threat to the cost advantage it possesses. As blockbusters come off patent protection, and regulatory time-lines get shorter, competition in the generics space is getting intense. These factors, combined with the consolidation of supply chains, and the administration of price ceilings in various countries, are leading to price erosion, testing India’s ability to provide cost-effective generic solutions, while ensuring patient safety remains the foremost priority.
Indian pharma is used to high growths and high returns. As we step into the future, maintaining this growth requires greater prudence for execution excellence, as well as greater domain understanding. The success mantra that yielded returns till now does not offer a sustainable advantage unless we move from reverse engineering to building an innovative pipeline, requiring different levels of manufacturing and R&D capability, supply security, reliability and operational standards.
Service expectation lines are blurring between pharma and other consumer industries, calling for value engineering and supply chain optimisation enabling faster response times. Any slip in meeting these expectations of supply reliability, cost efficiency and regulatory compliance will be detrimental to the industry.
These challenges can be addressed by government and industry collaboration. Policies regarding promotion of localisation of key input materials, enabling a better control on the backend supply chain, will go a long way in improving overall reliability. The current proposal to rationalise and harmonise quality standards across the country and run frequent checks that enable third party certification will help enhance the image of the industry.
India is ranked third regarding global pharma volume, leading in all the four key segments—Active Pharmaceutical Ingredient, Formulations, Biosimilars and Contract Research Services. It supplies 20% of global exports in generics, to over 200 countries, and the projected CAGR over 2015-20 is 12.89%. It is a sought-after destination to manufacture export-oriented branded and generic drugs.
To sustain its position as a major player, it needs to build on the core strengths and be prepared for the future. The areas that require a roadmap are operationalising standards on a day-to-day basis through quality in process design and culture, enabling a first-time right philosophy, building a domain expertise by focusing on innovative solutions, and developing a competency model that equips talent with a deeper understanding of the science behind products. Focusing on these areas will allow India pharma to meet and exceed the growing expectations of regulatory bodies, and maintain high returns that the industry has experienced thus far.
By Kanish Malik, President & global head of Operations, Glenmark Pharmaceuticals