The market for the supply and manufacture of active pharmaceutical ingredients is constantly changing, with several trends and factors driving these developments.
Understanding how to reap the benefits of these trends can assist businesses in making justified decisions about the greatest challenges for API development, the best locations for their products, and what to expect from sites.
Image Credit: DSI, a PLG Company
The API contract manufacturing organization (CMO) market has undergone an efficient change in recent years.
Capacity has retracted, and demand has increased, which has resulted in CMOs rejecting projects as demand becomes greater, explains David Blasingame, Senior Project Management Consultant, and Dr. Daniel Torok, Senior Drug Substance Consultant at DSI, a ProductLife Group company.
David Blasingame adds that there are concerns over whether APIs produced by small businesses have true potential regarding funding, which means CMOs are hesitant to allocate resources for them.
The push to onshore
While an increasing trend has been noted to onshore API programs, a difficulty that businesses face is that compared to other markets, there is not the same degree of investment in infrastructure in the sites based in the United States. The experts from DSI also note that this is influencing capacity even more.
A client that has been aiming to move a project inside the United States to a different location has faced barriers with capacity.
“If we don’t get our product into the schedule, they’ve told us it would be a year and a half until we can get it in,” states the Senior Drug Substance Consultant at DSI, David Adams.
“They’re definitely packed. And with the other processes that a company has to succeed at, all the paperwork, the quality control, they have to have all of that capacity along with the equipment. Even that’s putting constraints on their corporate business possibilities.”
Awareness on the CMO side in the United States continues to be restricted, even when a business has Fast Track designation for its product.
“I’m not sure American manufacturers fully wrap their heads around Fast Track,” Dan says. “I see a handful of European manufacturers whose business development team seems to get it.”
“They understand that if they get a piece of this action, they’re going to be locked in for longer than other things, most likely, because they’re going to be moving at 100 miles an hour to get there.”
“So, there won’t be time for a secondary supplier to come in. They also realize the product is closer to that commercialization point, which is where every drug substance CMO wants to be. You want to have your plant filled with commercial products because they’re stable.”
Head of Drug Substance Services at DSI, Dr. Jim Mencel, explains that this movement by manufacturers in Europe adheres to the EU mission statement to become the largest manufacturing location for APIs globally.
“The funny thing is that Fast Track is an American concept. Yet, Europeans have latched on to it as a business opportunity more so than the U.S. has, at least on the supply side.”
Picking the right site
Jim explains that when selecting a location, it is important to understand what equipment the manufacturer has and their service offer.
“If your process has special needs, like high pressure or temperature, you must ensure that their equipment can do what you need it to do or handle the specific configurations you need,” he notes.
New locations are continually being opened on the drug product side, but sponsors frequently discover that, while these novel businesses may have the tools, they may not have the in-house experience to control a sponsor’s timeline and process, particularly for expedited products, explains the General Manager at DSI, Brian Lihou.
David Blasingame agrees, adding that the client typically ends up funding the hiring of this expertise and the construction of the facility.
The experts from DSI warn that the risks can be significant if the success of the project rests on a buildout space that is not achieved at a location.
U.S. sites need to be modernized and companies with money can do that. But the other problem is expertise. The number of people with a manufacturing background in the US with small molecules is small and diminishing rapidly because all the jobs have been offshored.”
Dr. Daniel Torok, Senior Drug Substance Consultant, DSI, a ProductLife Group Company.
Jim explains that a value proposition of DSI is the experience to establish whether the advertised abilities of a location in the United States are tangible. If the business does not have the personnel, DSI can collaborate with the sponsor and fill in these gaps for an effective result.
Show us the value
All raw materials at present are sourced from China, which has an impact on APIs. This movement may change in the next decade with increased production of APIs returning to the United States or Europe at minimum.
It would be nice if we could secure our own supply chain.”
David Blasingame, Senior Project Management Consultant, DSI, a ProductLife Group Company.
Jim warns that businesses would need to see a business offer that would make the investment in a site worthwhile.
In the next few years, the challenge of raw materials and where they are sourced is likely to become more critical, especially considering the latest guidance for nitrosamines.
Jim explains that the Food and Drug Administration expects sponsors to have a transparent supply chain and to find the sources of everything that has been utilized to create their starting material.
This will be challenging for European or United States-based businesses trying to understand the complete supply chain for raw materials in Asia, but sponsors will be asked to identify possible challenges in a more comprehensive manner.
Acknowledgments
Produced from materials originally authored by Meranda Parascandola from Design Space InPharmatics.
About DS InPharmatics 
DS InPharmatics (DSI) provides regulatory, technical, and project management consulting services to healthcare product companies that manufacture and/or market pharmaceuticals, biopharmaceuticals, and cellular and gene therapy products.
Since 2007 we have provided our clients with innovative strategies and exceptional quality work products intended to enhance product development, approval, and marketing presence. Whether advocating CMC strategy, directing CMC operations or developing CMC submission content that represent the best interests of emerging biotech, we focus on the critical CMC issues and build programs that enhance development.
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