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Competition and Government Regulations Forcing a New Pharmaceutical Business Model
 

Competition and Government Regulations Forcing a New Pharmaceutical Business Model

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Competition and Government Regulations Forcing a New Pharmaceutical Business Model ...

Competition and Government Regulations Forcing a New Pharmaceutical Business Model
The US Food and Drug Administration (FDA) recently announced progress
toward 21st century regulation of the pharmaceutical industry, outlining
new steps in its strategic initiative to modernize regulation of pharmaceutical
manufacturing. The FDA believes this initiative will enhance safety and
quality in drug manufacturing as well as increase manufacturing efficiencies.
ARC believes that the single most important part of this initiative is
the issuance of five new guidelines. The guidance on e-records and signatures
makes it clear that Part 11 is alive and well and will continue to evolve
with technology. The four draft guidances indicate
that the FDA is serious about creating a regulatory
program that encourages and simplifies the adoption
of process analytical technology. ARC believes
the FDA’s PAT initiative may soon have more impact
on the pharmaceutical industry than 21 CFR
Part 11.

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    Competition and Government Regulations Forcing a New Pharmaceutical Business Model Competition and Government Regulations Forcing a New Pharmaceutical Business Model Document Transcript

    • THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN ARC INSIGHTS By John Blanchard 21 CFR Part 11 is alive and well with minor changes from its original intent. But the US FDA’s Process Analytical Technology initiative may soon have more impact on the pharmaceutical industry than Part 11. INSIGHT# 2003-39MP&H SEPTEMBER 17, 2003 Competition and Government Regulations Forcing a New Pharmaceutical Business Model Keywords 21 CFR Part 11, Process Analytical Technology, PAT, Pharmaceutical Summary The US Food and Drug Administration (FDA) recently announced progress toward 21st century regulation of the pharmaceutical industry, outlining new steps in its strategic initiative to modernize regulation of pharmaceuti- cal manufacturing. The FDA believes this initiative will enhance safety and quality in drug manufacturing as well as increase manufacturing efficien- cies. ARC believes that the single most important part of this initiative is the issuance of five new guidelines. The guidance on e-records and signa- tures makes it clear that Part 11 is alive and well and will continue to evolve with technology. The four draft guidances indicate that the FDA is serious about creating a regulatory program that encourages and simplifies the adop- tion of process analytical technology. ARC believes the FDA’s PAT initiative may soon have more im- pact on the pharmaceutical industry than 21 CFR Part 11. Analysis The US FDA’s regulations and initiatives like 21 CFR Part 11 electronic re- cords requirements, a risk based approach to compliance, quality assurance through use of process analytical technology (PAT), and similar European initiatives have become or are becoming regulatory requirements through- out the global pharmaceutical industry. In addition, science and technology, high barriers to market entry, and governmental protection policies are no longer obstacles to increased competition. Reliance on blockbuster drugs, mergers and acquisitions, and continuing price increases are no longer sustainable business strategies. Most large therapeutic categories are crowded, while the needs of smaller therapeutic categories remain unfulfilled. On a macro level, healthcare costs approach-
    • ARC Insights, Page 2 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com ing 25 percent of gross domestic product (GDP) are not sustainable in any country. Cost shifting, promotion of drug development in smaller thera- peutic categories, improved quality, and improved efficiency are required. Competitive Landscape The rising cost, limited availability, and demand for new drugs is driving increased competition. Generic competition capable of devastating a fran- chise is increasing as patents expire or are successfully challenged. Large pharmaceutical companies that did not invest in biotechnology now find themselves at a disad- vantage as over 40 percent of new drug entities are expected to be biotechnology products. Europe’s promi- nence in bulk active ingredient manufacturing is being challenged by the growing expertise and lower cost in Asia. This can be expected to increase as India and China begin to enforce more rigid intellectual property protection rights. As large therapeutic categories become crowded, large companies are protecting blockbuster drugs with an over-the-counter (OTC) strategy or are forced into smaller therapeutic categories where they have less expertise. Contract manufacturing is now commonplace and grow- ing at 4 percent per year. Guidance for Electronic Records and Signatures Part 11 is alive and well with minor, but significant, changes. These changes are consistent with its original intent to encourage the use of new science and technology to improve public health and safety. This includes respon- sibility to ensure an affordable health care system. The first significant change is that the FDA will exercise enforcement discretion on most sys- tems that were in operation before August 20, 1997, essentially a conditional grandfather clause the industry expected. The second signifi- cant change is that the FDA re-enforced their traditional risk-based approach so that Part 11 now applies to fewer documents, essentially elec- tronic quality documents in high risk processes. Finally, the FDA states that hybrid systems are acceptable under certain conditions. After promulgating the US 21 CFR Part 11 ruling and realizing there were still some challenging technical and fiscal issues, the FDA has been consis- tent in its general guidance. It requires that pharmaceutical companies use API Manufacturing Discovery Clinical Trials Drug Manufacturing Global Competition Branded R&D ManufacturingGeneric New Proteins & Biologics Global Regulatory Initiatives Part 11SOA HIPAA cGMPsPAT Product Safety Directive2001/95/EU Annex 11 Data Protection Directive95/46/EC API Manufacturing Discovery Clinical Trials Drug Manufacturing API Manufacturing Discovery Clinical Trials Drug Manufacturing Global Competition Branded R&D ManufacturingGeneric New Proteins & Biologics Global Regulatory Initiatives Part 11SOA HIPAA cGMPsPAT Product Safety Directive2001/95/EU Annex 11 Data Protection Directive95/46/EC Competition and Regulations Are Driving a New Pharmaceutical Business Model
    • ARC Insights, Page 3 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com good scientific methods to interpret the ruling, conduct a risk-based system by system gap analysis, develop a risk-based compliance or remediation plan based on this, and begin a good faith documented effort to execute the plan. It also requires a multi- disciplinary team approach that the industry has not gen- erally used. FDA PAT Initiatives Drive New Business Model In the traditional pharmaceutical industry business model, multi-disciplinary teams are rarely used, organizations are isolated, and patient information is less than satisfactory. Scientists in drug discovery would typically toss a promis- ing new chemical entity (NCE) over the organizational wall to the clinical medical researchers. Manufacturing people knowledgeable in current good manufacturing practices (cGMPs) would not be involved until there was little ability to simplify process validation and compliance. This situation, coupled with FDA regulations, resulted in de facto quality control rather than quality assurance and placed little emphasis on manufacturing efficiency. The rising cost and increased complexity of protein and biological processes and drugs requires a dramatically different business model. In the new model there are multi-disciplinary teams, close coupling of discovery, clini- cal trials, manufacturing, and patients to affect reduced time to market of higher quality, more effective, and less costly drugs. In this model, more rigorous clinical data, process data, and post-production patient data are used for continual process optimization with minimum cost and time for process revalidation. ARC believes the following FDA draft guidances are a major step toward achieving this. • A draft guidance for Process Analytical Technology (PAT). • A draft guidance on a process for resolving disputes arising over scien- tific and technical issues related to pharmaceutical current good manufacturing practices (cGMP). Most systems older than August 20, 1997 are grandfathered Part 11 applies to newer high risk systems and non-compliant older systems Part 11 applies to fewer documents Hybrid systems are acceptable under certain conditions E-Copies and archiving require- ment are clarified, but still evolving with available technology and financial viability Until revised GMPs and changes to Part 11 are resolved, FDA intends to exercise enforcement discretion with regard to validation, audit trail, records retention, and copies of records Highlights of August 2003 US FDA 21 CFR Part 11 Guidance on E-Records and Signatures
    • ARC Insights, Page 4 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com • A draft guidance on preparation and use of comparable protocols for assessing chemistry, manufacturing, and control changes to protein drug products and biological products. • A draft guidance on the aseptic processes used in the manufacture of sterile drugs, emphasizing current science and risk based approaches. Commercial Manufacturing Building Automation System Research CAPA QMS Revalidation Robust Clinical Trials Robust, Increased Clinical Manufacturing Process Optimization Automation SuppliersAutomation Suppliers CustomersCustomers CustomersCustomers Commercial Manufacturing Building Automation System Research CAPA QMS Revalidation Robust Clinical Trials Robust, Increased Clinical Manufacturing Process Optimization Automation SuppliersAutomation Suppliers CustomersCustomers CustomersCustomers 21st Century Integrated Pharmaceutical Enterprise Business Model Recommendations • Use a multi-disciplinary team approach to regulatory compliance and operational excellence across discovery, clinical trials, and commercial manufacturing. • Successful deployment of PAT technology for process optimization will require improved automation evaluation and support capabilities. Please help us improve our deliverables to you – take our survey linked to this transmittal e-mail or at www.arcweb.com/myarc in the Client Area. For further information, contact your account manager or the author at jblanch- ard@arcweb.com. Recommended circulation: All MAS-P & -H clients. ARC Insights are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permis- sion from ARC.