Geo-Sourcing Trends 2011: Analysing the latest sourcing trends and ...
Transcript of Geo-Sourcing Trends 2011: Analysing the latest sourcing trends and ...
REUTERS/Michaela Rehle
GEO-SOURCING TRENDS 2011ANALYSING THE LATEST SOURCING TRENDS AND PHARMERGING MARKETS
MOLLY BOWMANMARCH 23, 2011
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THOMSON REUTERS GENERICS & API INTELLIGENCE • 20 years experience in tracking API manufacturing and generics
• An industry pioneer in research and analysis of global API manufacturing activity
• Develop and market the Newport database family
• More than 300 customers and 3,000 users across 43 countries in the Innovator, Generic, OTC and API manufacturing industries
• Serving the needs of– Business Development & Licensing Professionals– Portfolio Selection Teams– R&D and Regulatory Specialists– API Sourcing Specialists
• Team based in Portland, Maine, USA
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AGENDA• Examining sourcing trends
• Evolution of sourcing markets
• Analyzing rising costs
• Western shift
• Pharmerging markets
• Prospects for the future
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GLOBAL MANUFACTURING
Source: Frost & Sullivan, CIBC
• China and India projected to represent 10% worldwide outsourcing
In-house68%
Outsourced FD20%
Outsourced API12%
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GLOBAL API CONSUMPTION
Source: CPA 2008 Figures
• Global API market expected value of $108 billion in 2015
• China and India hold 60% of Western EU API market
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MERGERS & ACQUISITIONSCompany Backward
Integrated?Target
Teva Barr, IVAX, Sicor, ratiopharm
Sandoz (Novartis) Hexal, Eon, Ebewe
Mylan Merck Generics, Matrix
Watson Andrx, Arrow, Sekhsaria
Hospira Mayne, Orchid
Perrigo Agis
Zentiva (Sanofi) Eczacibasi, Sicomed
Actavis Amide, Alpharma
Dr Reddy’s Betapharm
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DRIVERS OF SOURCING DECISIONS• Capabilities
• Capacity
• Quality
• Speed
• Relationships
• Cost
• Regulations
• Risk
• PR
• Logistics
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API MANUFACTURING LANDSCAPE
Source: Newport Premium™
175
253
301
1488
EstablishedLess EstablishedPotential FutureLocal
Experience in supply regulated
markets
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REGIONAL HUBS – API MANUFACTURING
Source: Newport Premium™
Over 1/3 of the 400+ experienced manufacturers are in India and China 104
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5235
15
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125 USAIndiaChinaItalySpainJapanGermanyOther
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API MANUFACTURER RATINGS - INDIA
Source: Newport Premium™
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120
Established Less Established Potential Future
20062010
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API MANUFACTURER RATINGS - CHINA
0
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40
60
80
100
120
140
160
180
Established Less Established Potential Future
20062010
Source: Newport Premium™
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API MANUFACTURER RATINGS - ITALY
0
5
10
15
20
25
30
35
Established Less Established
20062010
Source: Newport Premium™
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US TYPE II DMF FILINGS
Source: Newport Premium™
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50
100
150
200
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350
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
India China Italy RoW
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US FDA INSPECTIONS
Source: Newport Premium™
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
RoW
Italy
India
China
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US ANDAS – INDIAN COMPANIES
Source: Newport Premium™
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US ANDAS – CHINESE COMPANIES• Chinese ANDAs
– First final approval in December 2010 (Novast)
• Three additional companies with final ANDAs acquired from companies like Ranbaxy, Par, Actavis– Zhejiang Huahai (Huahai US Inc)– Beijing Pharmaceutical (Beijing Double Crane)– Yabao Pharma Group (Beijing Yabao) (ANDAs discontinued)
• Additional filings waiting for approval
• FDA backlog slowing down manufacturing transfer to China
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EUROPEAN COS FILINGS
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
IndiaChinaItalyRoW
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SOURCING DRIVERS - INDIA • Cost advantage
– 50% less to make drugs, trials at 10% of the cost, research at 15%
• Capital efficiency– Up-front costs 25-50% less due to local labor, materials and equipment
• Improved process engineering drives down costs
• Capacity increasing annually– 2000-2004 tripled– Second and third tier companies now investing and reaching into regulated markets
• Rich talent pool– 125,000 chemical engineers and 25,000 pharmacists graduate each year
• FDA approved infrastructure only eclipsed by the US
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SUPPLY AGREEMENTS - INDIA
Company Partner ActivityDivi’s AstraZeneca naproxen, esomeprazole API
Hikal Degussa API and intermediates
Dishman Solvay eprosartan API
Neuland Bausch & Lomb besifloxacin, ofloxacin API
Alembic Greenstone azithromycin API
Cipla Boehringer amlodipine API
Ranbaxy AstraZeneca esomeprazole API
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SOURCING DRIVERS - CHINA • Talented pool of scientists and engineers
• Lower cost base
• Improving IP and anti-counterfeiting environment
• Leadership (cost and/or technical) in certain product classes– Fermentation-based APIs– Intermediates– Base chemicals
• Scale of infrastructure
• Government support for R&D
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SUPPLY AGREEMENTS - CHINA
Company Partner Activity
Zhejiang Huahai Merck API, intermediates
Zhejiang Hisun Eli Lilly capreomycin API, vet drugs
Zhejiang Hisun Alpharma vancomycin API supply
Ningbo Smart Novartis diclofenac sodium API
Chongqing Huapont Janssen API supply
Hubei Shine Star Flamma amino acid & derivative supplyHisoar Boehringer API, intermediates
Zhejiang Medicines Hospira vancomycin API
Shenzhen Hepalink APP heparin
Aurisco Xellia mometasone API
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SOURCING CHALLENGES
Cost Type China India Europe U.S.
Labor $ $ $$$ $$$
Environmental $$$ $ $ $
Energy $$ $$ $ $
IP Protection $$ $$ $$ $$
cGMP Monitoring $$$ $$ $ $
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INDIAN IMPORT REGISTRATIONSTop Companies• Organon • Zhejiang Hisun• Evonik Rexim SAS• Kyowa Hakko Kirin• BASF• ACS Dobfar SpA • Archimica SpA
Top Products• clavulanate potassium
• erythromycin thiocyanate
• cefotaxime sodium
• thiamine mononitrate
• amoxicillin sodium
• amoxicillin
• ceftriaxone sodium
Source: Newport Premium™
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67103
207
56
54
31
46
42
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237 China
France
Germany
Italy
Japan
Netherlands
South Korea
Spain
Switzerland
USA
RoW
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CHINESE IMPORT REGISTRATIONSTop Companies• Kyowa Hakko Kirin Co Ltd• Ajinomoto Co Inc • Ranbaxy Laboratories Ltd• Societe Oril• Orchid Chemicals• Dr Reddy's Laboratories Ltd• Janssen Pharmaceutica NV• Evonik Rexim SAS
Top Products• clavulanate potassium
• cefixime
• cephalexin
• amoxicillin
• cefaclor
• ceftizoxime sodium Source: Newport Premium™
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FranceGermanyIndiaIrelandItalyJapanSouth KoreaSpainSwitzerlandUSARoW
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WESTERN SHIFT
• Indian companies purchasing EU made API
• Returning projects– Pfizer Center Source
• tried to establish steroid production in China and Taiwan, moved production back to US and improved processes
– Custom (UK)• set up a facility in China, returned to UK due difficultly finding
quality management, demand from customers for EU made product
Company Partner ActivityAlbemarle Dr Reddy’s Ibuprofen API
DSM Guangzhou Baiyunshan & Shandong Xinhua
Cefalexin API
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QUALITY ISSUES• Suspended COSs from Indian & Chinese
companies– Fleming, Shantong Jinyang, Calyx, Tianjin Zhongan
• Heparin from China
• Ranbaxy imports banned
• Apotex sourcing issues
• Aurobindo restricted imports
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SPECIALIZED MANUFACTURING• High Potency
– Lucrative targets for API manufacturers– Many companies investing (SAFC, Novasep)
• Continuous Process & Separation– Indian companies using enzymatic catalysts– More Asian companies investing in micro-reactor
technology
• Micronization– Improves formulation and dissolution properties– Better bioavailability, less API needed
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FOLLOW-ON BIOLOGIC DEVELOPMENT
Company Proteins Antibodies Vaccines LaunchesTeva FP UD FP EPO, GCSF
Sandoz FP UD EPO, HGHBiocon FP UD FP GCSFHospira FP UD EPO, HGHZydus FP UD GCSF
STADA FP UD EPOActavis FP Via Bioton
Ranbaxy FP UD FPDr Reddy’s FP FP GCSF
Apotex FP UD FPCipla UD
Key: FP = Full Production, UD = Under Development
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PHARMERGING MARKETS• Predicted to expand by $90bn during 2009-2013
• Emerging Markets:– Argentina, Poland, Thailand, Indonesia, South Africa, Romania,
Ukraine, Pakistan, Mexico, South Korea, Taiwan, Brazil, Russia
India
China
Pharmerging
Location of API Manufacturers
Source: Newport Premium™
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PHARMERGING API MANUFACTURERS
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Less Established
Potential Future
Local
Source: Newport Premium™
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FUTURE PROSPECTS SECOND WAVE EMERGING MARKETS• Many sourcing challenges
• Little experience with regulated markets
• Small API industry
• Limited dose capabilities– Some specialties in Argentina (high potency, biologics)
• No indications of significantly better price at acceptable quality than in India or China
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FUTURE PROSPECTS - INDIA• Increased emphasis on FD for regulated markets
• Increased CRAMS business
• Greater reliance on China for APIs and advanced intermediates
• Increased costs as Chinese materials become more expensive and salaries rise
• Increased investment into local market
• Continued emphasis on large batch production
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FUTURE PROSPECTS - CHINA• Strengthened SFDA oversight
• New GMP regulations
• Greater EHS, waste treatment enforcement
• Increased costs of labor
• Improvements in quality, technical packages, IP
• Additional companies will expand into finished dose for regulated markets
• Many companies will stay focused on local market
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FUTURE PROSPECTS - EUROPE• Majority of APIs coming off-patent post 2015 are
specialist driven
• Continued investment in process improvements and niche product manufacturing
• EGA proposed regulations to allow stockpiling and export to countries with less IPR
• Continued pricing pressures and competition from India & China
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THANK YOU
Molly BowmanManager, Small Molecule ResearchThomson Reuters
+1 207 871 9700 [email protected]