Pharma Focus Asia Issue 21

Issue 21 2014 www.pharmafocusasia.com

Rethinking Drug Discovery

BioprintingThe patent landscape

The Six GreaTShifTSTransforming the pharma industry

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to look for investing more in developing new

products. This would increase the number of

products serving the market while also meeting

unmet medical needs by reaching underserved

markets.

Succeeding in this new landscape will require

partnerships between pharmaceutical compa-

nies, governments and/or non-profit organisa-

tions. Further, pharmaceutical companies will

need to step outside their comfort zone and

develop partnerships with players from other

industries for better outcomes.

The cover story of this issue by Brian D

Smith from PragMedic, UK, provides an insight-

ful analysis of six great shifts transforming the

pharma industry. The article covers shifts in

value, network and information globally, along

with the systemic shift and trimorphic shift. Dr

Smith explores the implications of the six great

shifts and how selection pressures will impact

pharma strategies.

Foreword

Prasanthi PotluriEditor

Gearing up for Post-Blockbuster EraThe golden era of blockbuster drugs is coming to

an end but there are reasons to believe that new

growth opportunities exist for pharma compa-

nies willing to adapt to the change. The FDA

approved 27 New Molecular Entities (NME) in

2013, and this number came down from 39 in

2012 and 30 in 2011. Twenty-eight first-of-a-kind

drugs were approved annually over the past five

years. A few more new drugs were reformulated,

incremental modifications or new indications

of existing drugs were also done.

According to Bain & Company, strong

pharma and biotech companies are restructuring

their organisations and planning to launch many

products simultaneously, rather than launching

one blockbuster every other year.

Switching to this model, known as ‘Pharma

3.0’, requires companies to adapt to new busi-

ness models. The traditional ‘Pharma 1.0’ model

concentrated on blockbuster drugs, where as

‘Pharma 2.0’ model focused on bringing more

product offerings to a global market. The next

phase of development, ‘Pharma 3.0,’ focuses

on service components. This model allows phar-

maceutical companies to target health benefits

per dollar spent, allowing companies to explore

a variety of new business models.

With the changing market dynamics, trans-

formation of technology, communications and

business, pharmaceutical companies need

2 Pharma Focus asia issuE - 21 2014

ContentSTRATEGY05 Bioprinting The patent landscape Robert W Esmond, Director, Biotechnology/Chemical Group,

Sterne, Kessler, Goldstein & Fox P.L.L.C., USA

11 Creating and Sustaining Cultural Change by Focusing on Operational Excellence

ThomasFriedli, Managing Director TECTEM, Vice Director Institute of Technology Management

NikolausLembke, Research Associate

ChristianMänder, Research Associate

University of St.Gallen, Switzerland

RESEARCH & DEVELOPMENT22 Rethinking Drug Discovery Subhadra Dravida, Founder and CEO of Tran-Scell Biologics &

TranSTox BioApplications, India

Prabhat Arya, Department of Organic and Medicinal Chemistry, Dr. Reddy's Institute of Life Sciences (DRILS), University of Hyderabad Campus, India

MANuFACTuRiNG27 Validation Projects in China Magnus Jahnsson, Director Regulatory Affairs,

Pharmadule Morimatsu, AB Sweden

Daniel Nilsson, Director GMP and Validation Services, Pharmadule Morimatsu, China

Erik Östberg, Project Validation Manager, Pharmadule Morimatsu, China

iNFORMATiON TECHNOLOGY32 Quality by Design A rapid and systemic approach for

pharmaceutical analysis M V Narendra Kumar Talluri, Assistant Professor, Department

of Pharmaceutical Analysis, National Institute of Pharmaceutical Education and Research, Hyderabad, India

WHiTE PAPER38 Crippled by Cost? CMO Quo Vadis Arun Ramesh, Senior Research Analyst, Beroe Inc., India

11

27

16 THE SIX GREAT SHIFTS

Transforming the pharma industry

Brian D Smith, Managing Director, PragMedic, UK

COVER STORY

TOGETHERWE WRITE HISTORY WITH PEPTIDES

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EditorPrasanthi Potluri

Editorial tEamGrace Jonessasidhar Pilli

art dirEctorM A Hannan

Product managErJeff Kenney

SEnior Product aSSociatESVeronica Wilson Ben Johnson

circulation tEamNaveen Msam smithsteven Banks

SubScriPtionS in-chargEVijay Kumar Gaddam

it tEamKrishna DeepakJames Victor

hEad-oPErationSs V Nageswara Rao

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Sasikant MisraManagement Consultantand ex-Deputy DirectorCII, Drugs and Pharma sector

Frank A JaegerDirector, New Business Development solvay Pharmaceuticals, Inc., usA

Douglas Meyersenior Director, Aptuit Informatics Inc., usA

Christopher-Paul MilneAssociate Director, Tufts Center for the study of Drug Development, Tufts university, usA

Alan S LouieResearch Director, Health Industry Insights an IDC Company, usA

Georg C TerstappenChief scientific Officer, siena Biotech s.p.A., Italy

Sanjoy RayDirector, Technology Innovation Merck Research Laboratories, usA

Rustom ModyDirector, Quality and strategic Research Intas Biopharmaceuticals Limited, India

Phil KaminskyFounder, Center for Biopharmaceutical Operations university of California, Berkeley, usA

Neil J CampbellCeO, Mosaigen Inc. and Partner endeavour Capital Asia Ltd., usA

Laurence FlintAssociate Director, Clinical Research schering-Plough Research Institute, usA

Kenneth I KaitinDirector and Professor of Medicine, Tufts Center for the study of Drug Development, Tufts university, usA

A member of

Confederation of Indian Industry

In Association with


BioprintingThe patent landscape The bioprinting of tissues and organs has been big news recently. However, the patenting of bioprinting techniques has quietly been going on for years. This article will discuss the patents covering the three process phases of bioprinting, the exceptions to patent infringement for experimental uses, and the prospects for further patenting and patent infringement lawsuits.

robert W Esmond, Director, Biotechnology/Chemical Group, sterne, Kessler, Goldstein & Fox P.L.L.C., usA

Additive manufacturing or 3D printing, as known more widely, is revolutionising the manufac-

ture and distribution of products. With the expirations of the basic additive manufacturing patents, anyone can purchase an inexpensive printer and replicate products. But these prod-ucts are often protected by various forms of intellectual property laws.

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The widespread additive manufactur-ing of products will pose many intel-lectual property rights challenges similar to those encountered by the recording industry in the 2000s when widespread copying of copyrighted music began.

Products made by additive manufacturing may infringe intellectual property rights as described in the table below. The limitations on enforcing the rights are also set forth (Table 1).

Products of commerce may be protected by any one of these IP rights. But the protection for bioprinted tissues and organs is much more limited as they are essentially utilitarian. While the software and code used to manufacture a bioprinted tissue or organ may be protected by copyright, the tissue or organ itself does not have a means for expression, ornamental features, or source of origin. In addition, trade secret protection for a bioprinted tissue or organ will provide little protection in view of national regulations that require the disclosure of the methods of approved making biologics and medical devices.

The best way to protect bioprinting innovation is with utility patents. While patents are expensive and time consuming to obtain and difficult to enforce, regulatory approval for a bioprinted tissue or organ is very expensive and time consuming. There is little incentive to invest in obtaining regulatory approval if the bioprinted tissue or organ can be knocked off once approved for marketing.

In order to determine what patents might dominate the making, using and selling of bioprinted tissues and organs, we carried out a patent landscape search1. The landscape search did not attempt to cover all patents filed on additive manufacturing techniques which are thousands in number.

As shown in table 2 below, the most frequent patent filers were located in the United States.

1 Thanks to Rebecca Hammond, Ph.D., for participating in the landscape search.

iP Right Nature of Right Limitations

Copyright Protects means of expression of an idea. useful to protect software, code, CAD drawings, sculptures and 3D models. Easy and cost-effective to obtain. Statutory damages are available in many countries.

Protection does not extend to the utilitarian features of a product. Difficult and expensive to enforce in court.

Design patent Protects novel ornamental features of a product, i.e., the way an article “looks.” Easy and inexpensive to obtain.


Trade Dress Protects the visual appearance of a product that indicates the source of origin. No filings required.


Trademark Protects indication of source of origin and protects consumers from being confused by the origins of a product. Easy and inexpensive to obtain.

Protection is limited to the mark and does not extend to the utilitarian features of the product. Difficult and expensive to enforce in court.

Trade Secret PProtects against misappropriation of secret information about a product maintained as a secret. Such information may include design plans, software and code used to make the product. No filings required but steps must be taken to ensure secrecy of the information.

Competitors can reverse engineer the product and method of manufacture. unless trade secret misappropriated, there is no protection once the information is no longer “secret.” Difficult and expensive to enforce in court.

utility Patent Grants limited right (generally 20 years) to exclude others from making, using and selling claimed a product or process.

Expensive and time consuming to obtain. Difficult and expensive to enforce.

The Limitations On Enforcing The Rights

Table 1

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cell aggregates, each cell aggregate comprising a plurality of living cells; wherein the cell aggregates are embedded in the at least one layer of matrix in a non-random predetermined pattern, the cell aggregates having predetermined positions in the pattern.This patent appears to cover a tissue

or organ containing layers of matrix and a plurality of living cell aggregates imbedded in the layers of the matrix in predetermined positions in a pattern. Thus, this patent appears to cover all bioprinted tissues and organs in the United States through its expiration date in 2028.

B. US 8143055 ‘Self-assembling multicellular bodies and methods of producing a three-dimensional biologi-cal structure using the same’ (Exp. Date June 24, 2029)

Assignee: The Curators of the University of Missouri (this patent may also be licensed to Organovo, Inc.). It was also filed in Australia, Canada, China, European Patent Office, Japan and South Korea. What is claimed is:

1. A three-dimensional structure comprising: a plurality of multicel-lular bodies, each multicellular body comprising a plurality of living cells cohered to one another; and a plural-ity of discrete filler bodies, each filler body comprising a biocompatible material that resists migration and ingrowth of cells from the multicel-lular bodies into the filler bodies and resists adherence of cells in the multicellular bodies to the filler bodies, wherein the multicellular bodies and filler bodies are arranged in a pattern in which each multi-cellular body contacts at least one other multicellular body or at least one filler body.This patent appears to cover bioprinted

tissues and organs containing patterned discrete filler bodies that resist migration and ingrowth of patterned multicellular bodies containing living cells. Such filler bodies may include sacrificial hydrogels that form tubular engineered blood vessels inside tissues and organs.

The search results were categorised into a preprocessing or design phase, production phase and post-production maturation phase2.

Bioimaging + CAD + Blueprint

Bioink + Biopaper + Bioprinter

Maturogens + Biomonitoring

+ Bioreactor

The most important issued patents in each category are described below3. Pending applications are not included as their issuance as patents is speculative.

2 See, Vladimir Mironov et al., Regenerative Medicine 3: 93-103 (2008).

3 For the complete search results, including pending appli-cations, please contact the author at [email protected].

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i. Bioimaging + CAD + Blueprint PatentsA. US 8579620 ‘Single-action three-dimensional model printing methods’ (Exp. Date: May 30, 2031). What is claimed is:

1. A system for printing a 3D physical model from an image data set, comprising:

a display component for display-ing one or more printing templates; and a single-action data process-ing component that, in response to a printing template selected by a single action by a user, executes the selected printing template to take the image data set as input and generates a geometric representation for use as input to a 3D printer;

wherein the selected printing template comprises predefined instructions for processing the image data set.The owner of this patent is not

known. It was filed only in the United States. This patent appears to cover a system for 3D printing any product from an image data set in response to a printing template selected by a single action by a user. The patent specifica-tion makes clear that bioprinted organs are contemplated: ‘FIG. 14 illustrates an example of printing a physical model of selected organs . . .’

ii. Bioink + Biopaper + Bioprinter PatentsA. US 8241905 ‘Self-assembling cell aggre-gates and methods of making engineered tissue using the same’ (Exp. Date Mar 11, 2028)

Assignee: The Curators of the University of Missouri. This patent is reportedly licensed to Organovo, Inc4. It was filed only in the United States. What is claimed is:

1. A three-dimensional layered structure comprising: at least one layer of a matrix; and a plurality of

4 See Organovo’s press release at http://ir.organovo.com/news/press-releases/press-releases-details/2012/Organovo-Announces-Two-Issued-Patents-First-Company-Patent-and-Key-Founder-Patent1130104/.

Company/institution

Organovo, inc. (uSA)

university of Missouri (uSA)

Oganogenesis, inc. (uSA, Switzerland)

Harvard Bioscience, inc. (uSA)

Tengion, inc. (uSA)

iNSERM (France)

Nanyang Technological university (Singapore)

Cornell Research Foundation, inc. (uSA)

Clemson university (uSA)

Wake Forest university Health Sciences (uSA)

Nscrypt, inc. (uSA)

Medical university of South Carolina (uSA)

Novatissue GmbH (Germany)

Patent Filers

Table 2


C. GB2478801 ‘Multilayered Vascular Tubes’ (Expiration date March 16, 2031).

Assignee: Organovo, Inc. It was also filed in Canada, China, European Patent Office, Israel, Japan, South Korea, Russia, and United States. What is claimed is:

1. An engineered multilay-ered vascular tube comprising an outer layer of differentiated adult fibroblasts, at least one inner layer of differentiated adult smooth muscle cells and differentiated adult endothelial cells, and having the following features: (a) a ratio of endothelial cells to smooth muscle cells of 1:99 to 45:55; (b) the engi-neered multilayered vascular tube is compliant; (c) the internal diam-eter of the engineered multilayered vascular tube is 6 mm or smaller; (d) the length of the tube is up to 30 cm; and (e) the thickness of the engineered multilayered vascular tube is substantially uniform along a region of the tube; provided that

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the multilayered vascular tube in non-innervated and free of any pre-formed scaffold.This patent describes in detail how the

engineered multilayered vascular tube is made by laying manually elongate cellular bodies and elongate bodies of gel matrix. The patent also describes the use of a bioprinter to make the same structure. This patent appears to cover bioprinted multilayered vascular tubes (e.g., tubular engineered blood vessels) containing an outer layer of differentiated adult fibrob-lasts and at least one inner layer of differ-entiated adult endothelial cells, with the additional required elements (a)-(e).

D. US 8747880 ‘Engineered Biological Nerve Graft, Fabrication and Application Thereof ’ (Expiration date May 28, 2031).

Assignee: The Curators of the University of Missouri (this patent may also be licensed to Organovo, Inc.). It was also filed in Australia, Canada, China, European Patent Office, Israel, Japan and Russia. What is claimed is:

1. A multicellular construct consisting essentially of: a multi-cellular region comprising: a plural-ity of living cells cohered to one another to form an elongate graft for restoring neural connection between the ends of a severed nerve; a plural-ity of a cellular channels extending axially through the multicellular region; and wherein the multicel-lular construct does not comprise any scaffold material at the time of implantation into a living organism having a nervous system.This patent covers a nerve graft that

may be made using bioprinting tech-niques.

E. US7051654 ‘Ink-Jet Printing Of Viable Cells’ (Exp. Date May 22, 2024)

Assignee: Clemson University. This was filed only in the United States. What is claimed is:

36. A method for forming an array of viable cells, said method comprising:


supplying a cellular composi-tion containing cells to at least one printer head of an ink-jet printer, said printer head defining an orifice through which said cellular compo-sition is capable of flowing;

forming one or more droplets from said cellular composition;

flowing the droplets through said orifice so that said cells are printed onto a substrate; and depos-iting a support compound onto said substrate for supporting said cells, said support compound forming a gel after being deposited onto said substrate.This patent appears to cover a method

of preparing a bioprinted tissue or organ by ink-jet printing a cellular composition containing cells and forming a gel after deposition.

F. US7625198 ‘Modular Fabrication Systems And Methods’ (Exp. Date Aug. 10, 2025)

Assignee: Cornell University. This patent was filed only in the United States. What is claimed is:

An article fabrication system comprising: a plurality of material deposition tools containing one or more materials useful in fabricat-ing the article; a material deposition device having a tool interface for receiving said material deposition tools, the tool interface of said mate-rial deposition device being movable in various paths . . . relative to a substrate to dispense material . . . a system controller operably connected to said material deposition device . . . and a tool rack comprising tool mounts .... This patent appears to cover an

ink jet printer that may be used for bioprinting. The specification makes clear that it may be configured for deposition of a hydrogel with seeded cells.

iii. Maturongens + Biomonitoring + BioreactorOnly pending applications were found on the post processing steps of bioprint-ing.

Thus, much patenting activity has been ongoing. Some of the patents overlap in coverage. For example, Missouri’s US Patent 8132055 appears to cover a bioprinted tissue or organ with filler bodies that may be sacrificial hydrogels that will form tubular engineered blood vessels. And, Organovo’s GB2478801 claims an engineered multilayered vascular tube with certain types of cells and dimensions. The engineered multilayered vascular tube may also be made with a filler matrix or sacrificial hydrogel that forms the tubular structure.

A number of patent applications were filed on the bioprinting device itself, although only Cornell’s US Patent 7625198 has granted as a patent in the United States.

There is room for additional patentable innovationsWhile it may seem that it is too late to start filing patent applications on bioprinting innovations, there remains room for further patentable improve-ments. A number of researchers have questioned whether it will be possible to create a functioning bioprinted organ. For

While patents are expensive and time consuming to obtain

and difficult to enforce, regulatory approval

for a bioprinted tissue or organ is very

expensive and time consuming.

example, Dr. Darryl D’Lima, a researcher at the University of Manchester in Britain, has been quoted as saying that “Nobody who has any credibility claims they can print organs, or believes in their heart of hearts that will happen in the next 20 years5.” And, there have been reports that Dr. Gabor Forgacs, inventor of the Missouri patents and Scientific Founder at Organovo, has questioned whether the days of printing organs will ever come6. In view of this skepticism, if one discov-ers a method of bioprinting a functional organ, the patenting of such a method should be patentable.

Existing patent filings may not impede commercialisation of bioprinted organs

It will be many years before a functioning bioprinted organ is made and approved by regulatory authorities. In the meantime, the basic patents may expire. Even if they do not, many countries have an excep-tion to patent infringement under what is called the experimental use exception. In the United States, the law provides for an exception to patent infringement when the patented item is tested for devel-opment of information for submission to the US Food and Drug administra-tion. Thus, in many countries, one can carry out clinical testing of a patented bioprinted organ or tissue without fear of patent infringement.

In conclusion, if the technical challenges of making a bioprinted organ are overcome, the future of bioprinted organs will be very bright. And, the patenting activity will continue.

5 http://www.nytimes.com/2013/08/20/science/next-out-of-the-printer-living-tissue.html?pagewanted=all&_r=1&

6 See, http://www.fool.com/investing/general/2014/04/09/organovo-holdings-inc-founder-we-may-not-print-org.aspx

au

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bio robert W Esmond's intellectual property law experience has

principally been in the biotechnology and chemical areas. His legal experience includes counseling clients in various intellectual property matters such as patentability investigations, validity and infringement analyses, freedom to operate and FDA/ANDA practice.

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Over the past decade, the impor-tance of Operational Excellence (OPEX) in the pharmaceutical

industry has grown significantly. A mere copy and paste from successful auto-motive excellence programmes does not work for the pharmaceutical structural requirements in the long run (Friedli et al., 2013). This has been realised by most of the pharma companies in the past ten years while working their way with individual roadmaps. Accordingly Lean, along with Six Sigma has grown in prominence with their principles, meth-odologies and tools supporting OPEX initiatives (Friedli et al., 2010, p.220).

Creating and Sustaining Cultural Change by Focusing on Operational ExcellenceAlthough highly standardised programmes of Operational Excellence (OPEX) have been implemented in almost every globally operating pharmaceutical company, the success of OPEX initiatives differs considerably. This article presents, based on the St.Gallen OPEX understanding, an overview of the factors that enable a sustainable OPEX culture and OPEX implementation.

thomasFriedli, Managing Director TeCTeM, Vice Director Institute of Technology Managementnikolauslembke, Research Associatechristianmänder, Research Associate

university of st.Gallen, switzerland

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However, the evolution of OPEX in the pharma industry showed that the path-way to OPEX is more than just about applying tools. As each OPEX initia-tive is shaped by a company’s culture, they tend to vary to a large extent with no universal recipe. But based on the research and project experiences of the Institute of Technology Management of the University of St.Gallen, Switzerland (ITEM-HSG) some common guidelines and procedures are identified.

A definition of operational excellenceModern approaches to OPEX have evolved from the understanding of Lean Production and are generally regarded as part of continuous, corporate improve-ment concepts (Friedli & Schuh, 2012). However, OPEX programmes cannot be viewed as standalone or as a set of new methods and tools as they comprise and rely on several already established manufacturing concepts (Friedli et al., 2010). Operational excellence is about the continuous pursuit of improvement of a production plant in all dimensions. Improvement is measured by balanced performance metrics comprising effi-ciency and effectiveness, thus providing a correlative basis for improvement evalu-ation (Friedli et al. 2013, p.24).

The philosophy of OPEX can be traced back to research results on excellence by Drucker (1971), Peters and Waterman (1982), Hayes and Wheelwright (1985), and Schonberger (1986), complemented by a long history of Japanese manufacturing concepts strongly linked to the Toyota Production System, which was first published by Sugimori (1977). In 2004, the ITEM-HSG started its activities in the field of pharmaceutical manufacturing to better understand OPEX and its implementation level in the industry. Based on the work of Cua et al. (2001) the ITEM-HSG developed a framework for the structured discussion of OPEX in a pharmaceutical context – the so called St.Gallen Operational Excellence Model (see Figure1) was established.

On the highest level of abstraction, this model can be divided into two larger sub-systems: a technical and a social sub-system.

The technical sub-system comprises of Lean practices like Total Productive Maintenance (TPM), Total Quality Management (TQM), and Just-in-Time (JIT). Most of these major operations management principles usually aim at a certain area of concern (such as low equipment availability, low quality, high inventories); companies implement them in order to address exactly these issues. Based on the first benchmarking results the ITEM-HSG structured these three sub-elements in a logical sequence in their implementation, namely: first TPM, second TQM and third JIT. Without TPM, the goals of TQM cannot be achieved, as there can be no stable process based on unstable equipment. The mastering of TPM and TQM are prerequisites to be able to take out waste without facing the danger that the whole underlying system starts to crash. (Friedli et al., 2013, p.17)

Second, there is a ‘social’ sub-system, the so called Effective Management System (EMS) which takes up the quest for an operational characterisation of management quality and work

organisation. This second system focuses on supporting and encouraging people to continuously improve processes. (Friedli et al., 2013, p.20)

Standardisation and visual management cannot be clearly related to either TPM, TQM or JIT. We call them basic elements because they can be regarded as basic prerequisites for successfully implementing the whole technical sub-system in operations and administration. As Imai (1986) explained in his book on continuous improvement, it is impossible to improve any process before it has been standardised, and thus stabilised. Visual management provides the workforce with updated information on process and performance data which assists the deployment of TPM, TQM, and JIT principles. (Friedli et al., 2013, p.20)

OPEX in the pharmaceutical industry - a status-quo The St.Gallen OPEX benchmarking assesses a set of production-specific KPIs that are closely linked to the technical sub-system (comprising TPM, TQM and JIT), as well as the social sub-system; Totally 50 operational KPIs are collected and analysed. A look at the results of the past 10 years shows an improvement in

Figure1:

The St.Gallen Operational Excellence Model (Friedli et al. 2013)

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performance of the global pharmaceuti-cal industry in terms of both effective-ness and efficiency (Friedli et al. 2013). Figure 2 indicates an extract of the benchmarking. From a TPM perspective the major advancement is the increased awareness of the relationship between good maintenance and good quality. In the TQM section, a positive develop-ment of the Complaint Rate Customer can be shown. It has decreased from 1 per cent in 2003 to 0.57 per cent in 2012. The Rejected Batches score (given as percentage of all batches produced) stayed at 0.75 per cent from 2003 to 2012. Looking at JIT performance, the median score reveals a change in Raw Material Turns i.e., from 4 turns per year in 2003 to 5.35 turns per year in 2012. Companies are increasingly trying to deliver a demand-oriented JIT instead of a stock-oriented approach. In the St.Gallen OPEX benchmarking (EMS

way of thinking. Schein (1985) defines organisational culture as a set of arte-facts (visible behaviour), values (rules, standards), and assumptions (invisible, unconscious) that are shared by members of an organisation. Creating and sustain-ing an organisational OPEX culture is a key challenge for the leadership team. Leadership characterised by a participative leadership style is essential to establish a high level of collaboration. Continuous improvement, the main philosophy of OPEX programmes requires shared tasks, empowerment, and teamwork with clear rules. Thereby it needs to be ensured that decisions are made at the lowest possible organisational level. Thus, the more individuals become involved in the decision-making process, the more variety and more ideas will be created. Further initiating a cultural change is mainly driven by activities designed and coordinated from corporate level. During

sub-system) absenteeism and fluctua-tion are used as measures of employee satisfaction. Absenteeism, measured as the percentage of the total working time an employee is absent, decreased from 4 per cent in 2003 to 3.3 per cent in 2012. Fluctuation, however, increased by about 50 per cent from 5 per cent in 2003 to 7.5 per cent in 2012. (Friedli et al., 2013)

How to create an OPEX cultureThe success of an OPEX program depends, to a greater extent on lead-ership and behavioural skills than on technical skills (Friedli et al., 2010, p.202). Managers often think ‘Changing Culture’ leads to ‘Changes in the Work’, but in fact it is backwards and culture is more an outcome than an input. ‘Changing the Work’ leads to ‘Change in the Culture’ as OPEX is a new way of leading, new way of working, and new

Figure 2:

Total Productive Maintenance (TPM)Comparison of the Benchmark Results from 2003 and 2012(medians)

2003 2012

PerformanceOverall Equipment Effectiveness (OEE)

36%2003

2012 55%

+53%

unplanned Maintenance

25%2003

2012 18% -30%

Total Quality Management (TQM)Comparison of the Benchmark Results from 2003 and 2012(medians)

2003 2012

Performance

Rejected Batches

2003

2012 0.75%

0.75%0%

Complaint Rate Supplier

1.0%2003

2012 2.0%

+100%

Complaint Rate Customer

1.00%2003

2012 0.57% -43%

Just-in-Time (JiT)Comparison of the Benchmark Results from 2003 and 2012(medians)

2003 2012

PerformanceRaw Material Turns

42003

2012 5

+100%

Finished Goods Turns

2003

2012 7

9

-22%

Service Level

95%2003

2012 97%

+3%

Effective Management System (EMS)Comparison of the Benchmark Results from 2003 and 2012(medians)

2003 2012

Absenteeism

2003

2012 3.3%

4.0%

7.5%

+50%

-19%

Fluctuation

5.0%2003

2012

Training Days

3.0 days

7.7 days

2003

2012

+157%

unskilled Employees

2003

2012 4%

10%

-60%

Performance

Extract On OPEX And EMS Performance in The Pharmaceutical industry From 2003 To 2013 (Friedli et al 2013)

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the first stage of implementation, corpo-rate support is absolutely essential. An obtrusive communication of the benefits and need for continuous improvement inside the organisation is key aspect for the OPEX leader. Besides this, the execu-tion of activities with a visible benefit and sense for employees as well as the credible behaviour is mandatory to successfully and sustainably manage OPEX.

Underlying values have a strong influence on the behaviour of employees, as values define how they behave, regardless of the situation and context (Modig & Ahlström, 2012). Learning experiences of the organisational members, especially those at site level, influence these values and consequently the sustainable success of OPEX. Besides corporate commitment, it is also essential to gain the site management‘s commitment for the deployment of OPEX in order to sustain cultural change at site level. This commitment should go beyond formal agreements and include the active involvement of the site leadership (Friedli et al., 2010, p.203). A common approach designed at a corporate level needs to be tailored for each site’s specific needs to a certain level. In a research project with a leading pharma company, the St.Gallen OPEX team developed an ‘OPEX Implementation Reference Model’ which comprises eight categories of influencing institutional and process-related factors (Figure 3). In each of these subcategories, practices were identified that supported or hampered a sustainable implementation. (Friedli et al., 2010, p.205)

The category of ‘Organisational Inertia‘ describes the degree to which a site is capable of adopting new practices and initiatives, i.e. of changing current or past practices and ways of working and thinking. An organisation‘s ‘culture‘ is the sum of its past and current assumptions, experiences, philosophy and values, and is expressed in its self-image, inner workings, interactions with its stakeholders and future expectations. This addresses differences in the availability

of highly professionalised corporate support, the connection between site objectives as defined in the vision and mission statement and OPEX objectives, as well as the visible engagement of corporate support people. ‘Management commitment’ means that the high level executives at site level directly participate in and pay attention to OPEX activities. The category of ‘organisational structure’ deals with the organisational integration of OPEX and available resources. The category of ‘people’ describes the level of general understanding of OPEX across the organisation as well as engagement and training of shop floor employees. The category of ‘implementation process’ focuses on the degree of standardisation in dealing with OPEX projects from idea selection to knowledge management. The more an initiative becomes a regular part of organisational activities the more standardisation can streamline activities. ‘Integration’ describes the process of attaining close and seamless coordination between departments, groups, systems and other corporate initiatives. (Friedli et al. 2013, p.206ff )

Enabling factorsDuring the research and project work of the ITEM-HSG OPEX team over the past ten years it has become clear that patterns of OPEX programmes feature some common elements. The

OPEX programmes of Pfizer, Novartis, Roche, Genentech and Merck Serono show that what matters most is structure and, in most cases a corporate support function, adequate training method-ologies, tools and activities. One of the most differentiating factors when comparing OPEX initiatives from one organisation to another is the way they are embedded into the respective global and local organisations. Having the right OPEX organisation in place unlocks the potential of OPEX due to designing, executing, coordinating, enabling, and communicating functions in order to create structures to get the right infor-mation at the right time to the right people. An OPEX training programme is essential for the sensitisation in OPEX of the employees at different hierarchi-cal levels as well as of course providing the necessary knowledge in principles, methods, and tools. Furthermore it is necessary to establish a common OPEX language at corporate management level and production sites. A change in the culture cannot happen without the use of OPEX tools and the execution of OPEX activities. As already indicated, a change in the way of working leads to a change in the culture. ‘You cannot create a culture without first introduc-ing tools. Culture doesn’t just evolve. You need to handle the practical world using concrete tools and projects. The

OPEX implementation Reference Model (Friedli et al 2010. p.204)

Figure 3

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cultural element gradually grows as a layer on top of the tools if you continu-ously emphasize the thoughts behind the tools.’ Andrew Finnegan from Novo Nordisk (Friedli et al. 2013, p.135)

SummaryToday most pharmaceutical manufactur-ers apply selected approaches, princi-ples and methods as well as tools from OPEX in order to increase efficiency. Operational Excellence (OPEX) as a continuous pursuit of improvements in all dimensions leads to changes in existing working environments. Changes in the work environment in the long term lead to changes in the culture. A culture of Operational Excellence is not a bunch of written rules by the manage-ment team; it is the decision by the organisation to commit to go beyond the ordinariness and not being satis-fied with the current status-quo. The major driver on a cultural level is the promotion of OPEX with all its aspects and the increased effort in training. As each OPEX initiative is shaped by an individual company’s culture, OPEX initiatives can vary to a large extent and it is the task of the OPEX leaders to balance the initiative (Friedli et al., 2013, p.114). An organisation with an OPEX culture provides personal and professional satisfaction for the employ-ees about what they do and gives the company some kind of legitimisation and purpose, thereby motivating its members to make a contribution in view of achieving superior goals (Friedli et al., 2010, p.206).LiteratureCua K. O., McKone K. E., Schroeder R. G. (2001). Relationships between imple-mentation of TQM, JIT, and TPM and manufacturing performance. Journal of Operations Management, Vol. 19(2), pp. 675–694.Drucker P.F. (1971). What we can learn from Japanese management. Harvard Business Review, Vol. 49 No. 2, pp. 110-22.Friedli T., Basu P.B., Gronauer T.,

Restoring Our Competitive Edge: Competing Through Manufacturing. Wiley, New York.Imai M. (1986) Kaizen: The Key to Japan's Competitive Success. Random House, New York.Modig N., Ahlström P. (2012). This is lean. Resolving the efficiency paradox. Rheologica Publishing, Stockholm.Peters, T.J. and Waterman, R.H. (1982), In Search of Excellence – Lessons from America’s Best-Run Companies, HarperCollins Publishers, London.Schein, E. H. (1985). Organizational culture and leadership: A dynamic view. Jossey-Bass, San Francisco, CA.Schonberger R.J., (1986). Japanese Manufacturing Techniques. The Free Press, New York.Sugimori Y., Kusunoki K., Cho F., Uchikawa S. (1977). Toyota Production System and Kanban system: materiali-zation of just-in-time and respect-for-human system. International Journal of Production Research, Vol. 15 (6), pp. 553–564.

Operational excellence is about

the continuous pursuit of

improvement of a production plant in

all dimensions. a

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thomas Friedli leads a team of 14 researchers and is lecturer in Business Administration. His main research focus is the management of industrial enterprises with a focus on production management. He is editor and author of several books, with his latest book ‘Leading Pharmaceutical Operational excellence’.

nikolaus lembke concentrates on the challenges of manufacturing companies with a focus on the pharmaceutical industry and the implementation of operational excellence. Nikolaus graduated in technology management as mechanical engineer at the university of stuttgart (Germany), complemented with a stay at the Nanyang Technological university (singapore).

christian maender concentrates on the challenges faced by the pharmaceutical industry. His focus is on the management of operational excellence programs. Christian graduated in mechanical engineering with a focus on production techniques at the Karlsruhe Institute of Technology (Germany).

Werani J. (2010). The pathway to operational excellence in the pharma-ceutical industry - Overcoming the internal criteria. Editio Cantor Verlag, Aulendorf.Friedli T. Basu P.B., Bellm D.,Werani J. (2013). Leading pharmaceutical opera-tional excellence - Outstanding practices and cases. Springer,Berlin, Heidelberg.Friedli, T., Schuh, G. (2012). Wettbewerbsfähigkeit der Produktion an Hochlohnstandorten. 2. Auflage, Springer Verlag, Berlin, Heidelberg.Hayes R.H., Wheelwright S.C., (1985).

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The Six GreaTShifTS

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Anyone involved with the life sciences sector can see how changes in technology, demographics and health economics are driving the industry. But these are merely symptoms; beneath them lie six great shifts that are transforming the industry and - determine which business models will survive and which will die.

brian d Smith, Managing Director, PragMedic, uK

Transforming the pharma industry

Cover Story


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Many languages have an equivalent to the expression “Seeing the forest for the

trees”, meaning the ability to discern the big picture from little details. That ability is important in life but especially true for leaders of life sciences sector. Every day we are bombarded with news of innovative technology, tighter regulation and new approaches to controlling healthcare spending. The challenge is to see how these myriad factors are combining to shape the sector. Only by doing so do industry leaders stand any hope of preparing for the future. My work uses evolutionary science to enable this necessary foresight. In this article, I’ll talk a little about the basic ideas behind my research before moving onto the findings. I’ll conclude by suggesting some practical implications that you may like to act on.

Organisms and organisationsAll good science is based on a well-supported theory; an explanation of how the world works. Germ theory, atomic theory and gravity, for example, are all good explanations that help us understand and manage the world around us. To understand a sector as complicated as life sciences, we need a very good theory and luckily we have one; evolution by natural selection. Darwin’s profound insight was first used to explain the profusion of species on our planet, but, in more recent years, has been used to explain the behaviour of industries. This is possible because biological and economic systems are both examples of complex, adaptive systems. That is, they are both large collections of many different entities that interact with and adapt to each other. Whether we are trying to understand organisms or organisations, the basic science is the same.

Complex, adaptive systems are characterised by non-linear behaviour; it’s practically impossible to predict what will happen in the long run. Instead, we can observe how the countless, seemingly random interactions result gradually in patterns of behaviour.

We call these emergent properties. The flocking behaviour of birds is an emergent property as are traffic jams. In my research, I consider how many different components of the life sciences sector combine to create emergent properties and what these properties imply for the competitive strategies of companies operating in this sector.

From the complex adaptive system of the life sciences sector, six important properties emerge: three from the industry’s social environment, three from its technological context. Each one is a shift from the way the world used to be to how it is transforming. And each shift creates an evolutionary selection pressure that favours some business models and discriminates against others. That’s why understanding these pressures and their implications is for the sector’s business leaders. In the following sections, I’ll describe the shifts, their origins and the selection pressures they create.

1. The great value shiftThe great value shift (see BOX 1) is a fundamental change both in how value is defined and who defines it. It is also about an increase in the heterogene-ity of value definition. It arises from the interaction of a number of separate social factors: demographics, healthcare inflation, rising expectations and disease patterns, amongst others.

The great value shift creates a selection pressure in favour of business

models that can understand what multi-dimensional, customer-perceived value is and create that context-specific value through its combination of product, services and pricing. At the same time, the value shift creates a selection pressure against business models that continue to understand value only in terms of clinical outcomes as defined by healthcare professionals and value-creation only in terms of products.

2. The global shiftThe global shift (see BOX 2) is a wide-reaching change in what customers want and where they are. Importantly, it includes not just globalisation of demand but also fragmentation of customer needs to accommodate many non-clinical factors such as aesthetics and convenience. It creates multiple, diverse global segments within any disease or therapy area. It arises from the interaction of trade internation-alisation, multinational corporations, increasing global wealth and subse-quent maturation and fragmentation of customer needs.

The global shift applies a selection pressure in favour of business models that can understand the heterogeneity of their market and use that understanding to select which parts to focus upon and deliver value to those targeted customers on a global basis. At the same time, the value shift creates a selection pressure against business models that continue

A shift in the definition of the value of treatments, interventions and associated products and services from a relatively simple and ubiq-uitous definition of value as improved clinical outcome, as defined by healthcare professionals, to a much more complex, context-specific definition of value defined in terms of clinical, economic and other factors by some combination of healthcare professionals, payers and patients or their proxies

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to view market heterogeneity only in clinical terms are unable to focus their resources appropriately and cannot deliver customer-specific value globally.

3. The network shiftThe network shift (see BOX 3) is a profound change in the way firms and other organisations structure themselves. It involves two factors: a reduction in the scope of what firms do within their own organisation and strengthening of their relationships with other organisa-tions. In essence, it is a shift from big firms to networked organisations that are more complex, more fluid and less well defined than we are used to. It arises from the combination of changes in capital markets, changes in transaction costs within and between companies, the specialisation of corporate capabili-ties and the increasing need to manage business risk.

The network shift applies a selection pressure in favour of business models that can build and manage dynamic, symbiotic networks of different organisational entities and use that structure to create better returns, better manage risk or some combination of the two across any part of the value chain. At the same time, the network shift creates a selection pressure against business models that persist in unicentric structures that fail to optimise returns and risk across the value chain.

The systeomic shiftThe systeomic shift (see BOX 4) is a shift of great consequence in the science and technology of the sector. It represents a move from a 19th century, Oslerian para-digm of medicine to a systems approach that seeks to support the efforts of indi-viduals to maintain their own wellbe-ing. It is based on enabling technologies, such as gene sequencing, biomarkers and synthetic biology. These enable bioin-formatics which in turn enables systems biology and so systems medicine.

The systeomic shift applies a selection pressure in favour of business models that can translate system medicine into an improvement of returns or a reduction risk at any point in the value chain. Conversely, it creates a selection pressure against business models that remain on a reductionist, hierarchical, population based understanding of disease or injury and the ways we manage them.

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The information shiftThe information shift (see BOX 5) is much more than the expansion of infor-mation technology. It is an inflection point in what information we collect, from where and how we manipulate and apply it. Importantly, it influences not only how we discover and develop drugs, devices and other medical tech-nologies but also how we produce prod-ucts, deliver services and understand our customers’ needs. It is based upon plat-form technologies such as biosensors and improved chips, memories and batter-ies. These enable connectivity, wearable technology and artificial intelligence. Alongside this sit new capabilities in making sense of large-scale data.

The information shift applies a selection pressure in favour of business models that use information to improve returns or reduce risk, whether that is in R&D, Operations or Sales and Marketing. The obverse is that the information shift creates a selection pressure against business models that remain based on the use of information in a small-scale, fragmented, unidirectional and deductive manner.

The trimorphic shift The trimorphic shift (see BOX 6) is a three way polarisation in the way that companies focus their resources. In essence, it involves research-based firms becoming even more innovative, low-cost firms becoming incredibly lean and efficient and customer-centric firms becoming excellent at tailoring their

A shift in the focus of economic activity from organisations with predominant centres and well-defined, stable boundaries and scope to one in which the focus of economic activity is polycentric networks with fluid, ill-defined boundaries and scope.

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A shift in the demand pattern for treatments, interventions and associ-ated products and services from one which is geographically focussed on western economies and in which demand heterogeneity is limited and based mostly on differing clinical requirements, to one in which demand has a global geographic spread and is very heterogeneous along multiple dimensions of clinical requirements, payer prefer-ences and patient needs, both clinical and otherwise.

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value propositions to segments of one. It arises from advances in supply chain architectures, research and development technologies and sales and marketing methodologies. Alongside this sits the polarisation and specialisation of corporate cultures in line with their business model.

The trimorphic shift applies a selection pressure in favour of busi-ness models that focus on creating value by either product excellence, operational excellence or customer intimacy and by targeting the parts of the global market that will respond to such an offer Similarly, the trimorphic shift will apply a selection pressure against firms that do not focus their resources and adopt a strategy that “straddles” across the three approaches. Such firms, who may have good products, efficient opera-tions and effective sales and market-ing processes will find themselves at a

disadvantage to those more focussed firms with either excellent products, hyper-efficient operations and the ability to identify and satisfy very small and specific customer segments.

Shifting your companyThe implications of the 6 great shifts are fundamental and real. In simple terms, firms will only survive if they

adapt to the selection pressures created by the shifts. But these pressures are huge and often work against each other, just like the need to be big and fast on the African savannah. In practice, this means that firms must and will evolve into their chosen market habitats and in the process become ever more special-ised. Roche, for example, is evolving into an outcome-oriented, research hyper-intensive firm, as recent acquisitions show. Medtronic is pushing towards a customer-intimate firm in which prod-uct development complements rather than leads its strategy. And Mylan is specialising into a hyper-efficient cost leader. Many other firms are evolving into networked entities, keeping only their differentiating activities in house. How they respond to the six shifts varies according to their chosen habitat:

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brian d Smith is a world-recognised authority on competitive strategy in the pharmaceutical and medical technology sectors. He researches the evolution of the sector at the university of Hertfordshire, uK and sDA Bocconi, Italy. He welcomes comments and questions on [email protected].

Elephants and Antelopes co-exist but use different approaches. In the same way, how companies use IT or systems medicine or create value differs, whilst still adapting to, the selection pressures implied by the shifts.

And the take home? First, recognise these great shifts and don’t become too focussed on individual factors in the

A shift in the collection, storage, use and commu-nication of information from small-scale, frag-mented, unidirectional and deductive to large-scale, integrated, perva-sive and inductive.

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A shift in our approach to understanding, perceiv-ing and managing the continuum of mental and physical health, illness and injury from one that is essentially reactive, population-based and hierarchical to one that is proactive, personalised and participatory.

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A shift in our approach to understanding, perceiving and managing the contin-uum of mental and physi-cal health, illness and injury from one that is essentially reactive, population-based and hierarchical to one that is proactive, personalised and participatory.

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4market. Second, understand that these shifts are inexorable and that you can only adapt to them, not stop them. Third, use the selection pressures as guides, allowing them to shape your choice of markets, strategies and structures. As someone once wisely said: It’s easy to lead a market – just work out where it’s going and get in front.


india inc aims for pharma dominance by 2020innovation & Technology to steer 2014 edition of CPhi/ P-MEC india

• Precededby2ndAnnualIndiaPharmaAwards2014

• CPhIIndiaTechnicalSeminaronindustrytrends & challenges

• +28000Pharmaprofessionalsfrom +95 countries expected to attend

UBM India, today announced the event highlights of CPhi india, which is co-located with P-MEC india, iCSE india & BioPh and slated for 2nd-4th December 2014 at the Bombay Exhibition Centre in Mumbai, India. The three days industry event, wherein key players of the pharmaceutical sector, worldwide, will congregate to connect, share and ideate, will be preceded by the india Pharma Awards, scheduled for 1st December 2014 at the Westin Hotel, Mumbai.

P-MEC india, co-located with CPhI India and in its 8th year, provides the industry with an international platform to showcase pharmaceutical equipment, machinery and technology to a forum of decision makers from across the world. Additionally, iCSE india has rapidly gained a positive reputation in the market by offering direct access to the outsourcing and contract services sector which is one of the fast-est growing segments within the Indian pharmaceuti-cal industry.

At CPhI India 2014, UBM will also release india Pharma Report, conducted with the help of research partner Global Business Reports. The report, in addi-tion to an overview of trends and analysis from key industry players, will explore new growth areas emerg-ing across the country and feature a robust analysis of the Indian pharma market.

Mr. Joji George, Managing Director, uBM india said “Against the backdrop of India constantly seek-ing to match and surpass western quality standards while maintaining lower manufacturing costs, at UBM, our objective for CPhI 2014 is to help elevate India as the global pharmaceutical destination by showcasing the unique positioning of the Indian pharma market

and provide an optimum investment platform amidst its global counterparts.”

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2nd india Pharma Awards, 2014 1st December 2014, Westin Garden City, Mumbai. Recognizing leading innovators across 9 categories, the india Pharma Awards initiated by UBM India acknowledge innovation and excellence in the Indian Pharmaceutical Industry, thus creating an industry platform to celebrate the contribution of the key players amongst their Indian and international fraternity. Against the backdrop of the global pharma industry increasingly looking at India for higher quality and low cost pharma solutions, the India Pharma Awards celebrate the thinkers and creators who consistently break new ground in the pharma sector thereby taking the value chain to its next level. Ernst & young is the process advisor for this prestigious event and the jury panel for 2014 India Pharma Awards is chaired by:• Dr. Sudarshan Jain, Managing Director,

Abbott Healthcare Solutions, • Dr. Ajit Dangi, President and CEO,

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The quest to undertake biological targets that are based on the regulation of signalling pathways is challenging the classical thinking in the drug discovery arena. Historically, the complexity of the biological system was underestimated! it is now well-accepted that compared to old biological targets that were focused on single gene or gene products, we need to undertake targets that are derived from complex and dynamic signaling pathways.

Subhadra dravida, Founder and CeO of Tran-scell Biologics & TransTox BioApplications, IndiaPrabhat arya, Department of Organic and Medicinal Chemistry, Dr. Reddy's Institute of Life sciences (DRILs), university of Hyderabad Campus, India

Drug discovery is a tough busi-ness! At the same time, it is the domain that provides an

opportunity to improve the quality of human health and allows recovering from the suffering due to various biological disorders. In the past decades, we have witnessed a major limitation in creating the next-generation drugs despite a significant boost in the financial spending for research and development. After the completion of the human genome project, we were guaranteed a plethora of novel

Rethinking Drug Discovery

RESEARCH & DEVELOPMENT



biological targets with the hope of producing novel drugs with fewer side effects. The genomics research has made us appreciate the high level complexity of our biological system and at the same time, it challenges the classical thinking in the drug discovery arena.

1.0 Classical drug discovery approach: the pre-genomic eraOver the decades, the biomedical drug discovery community’s efforts were focused on a single gene and the gene product, such as isolated enzymes, for example: kinases and phosphatases (See Figure 1). During this course of drug discovery, serious efforts were made to obtain the 3D structural information of a given enzyme; this was then heav-ily guided by extensive computational studies leading to the design of novel small molecules serving to kick-start the drug discovery programme. In this age, for example, the challenge is to discover novel small molecule that has the poten-tial to hit only one i.e. the desired kinases or phosphatases. The post-genomic era taught us that this is not going to be an easy undertaking, keeping in mind that human genome encodes more than 600 kinases and ~250 phosphatases.

2.0 The post-genomic eraThe completion of the human genome that resulted in the indication of nearly 30,000 genes promised a flood of targets to be further undertaken in drug discov-ery (see Figures 2 and 3). Although highly useful, the information at gene level is not easy to translate to functional protein complexes that are the key to various cell signalling events. Moreover, this infor-mation also does not lead to any post-secondary modifications that proteins undergo, such as glycosylation and ubiq-uitination etc., and, their effects on the signalling functions. In fact significant progress made in genomics and proteom-ics research has brought us to the doors of a high degree of complexity that lies in our biological system. Furthermore, it also challenges us to develop new research models for understanding the complexity of gene functions, such as the Protein-Protein Interaction (PPI) networks (commonly known as the signalling pathways) that are central to various cell functions in normal as well as disease states. The moment we accept the fact that, proteins do not function in isolation and that they are a part of highly complex network machinery, sets new challenges to examine their role(s)

Figure 1

Historical Drug Discovery!

Biological Target

Structural Information

Structure-Guided Small Molecule Discovery

Biased Approach•Need for new research models•

small molecule binder

Well-defined•Compact •Deep pocket•

in the drug discovery arena. Why is this case? The pathways that involve multiple protein-protein interactions are highly complex and dynamic. In many cases, even though, we as a community have been successful to obtain the structural information of a given protein-protein interaction, their participation is much more complex (for example, multi-protein complexes), and often leads to a limited information capture for the design of small molecules with desired biological effects.

3.0 Biological targets: signaling pathways-based approachThe earlier approaches focused on enzymes (such as kinases and phos-phatases) and relied heavily upon the structural information of a given isolated target which would then aid in the design and synthesis of small molecules. With a few exceptions, in most cases, the organic synthesis and medicinal chemistry efforts led to producing "heterocyclic compounds and small molecules that are rich in the sp2 character. The growing desire to undertake biological targets that are focused on protein-protein interactions and on the de-regulation of dynamic sign-aling pathways is changing our thought process for the choice of small molecules serving as a good starting point to devel-oping the drug discovery research path. Unlike the deep and well-defined pock-ets that enzymes do offer, in general, PPIs involve a shallow, large surface area

Figure 2

Pre-genomic era

Regulation and de-regulation of

signaling pathway-based

research

Single, isolated biological

targets, such as enzymes

Pre-genomic era

Drug Discovery – A Paradigm Shift


with extensive hydrophobic interactions (see Figure 4). Over the years, bioactive natural products have shown an excellent track record as modulators of PPIs, and, in most cases, this is achieved through allosteric sites rather than functioning at the PP-interface. Despite much progress that has been made towards obtaining structural information of a given PPI, due to the nature of these interactions that are generally a part of complex multi-meric protein complex, cell-based screens remain the choice to search for novel small molecules.

The drive to embrace the signal-ling pathway-based approach is the hallmark in the modern drug discovery arena! And, this need is also seriously questioning our classical approaches to accessing small molecules that were biased towards simple, flat, heterocyclic compounds. A million dollar question in this game, heavily relies on high quality functional cell-based (or commonly called as phenotype or pathway-centric) screen-

Figure 3

Going-in for Pathways!

small molecule binder

Need for a new thinking!map large surface area•shallow surface •combination of several weak •interactionsextended hydrophobic interactions•possible hot spots•

Figure 4

ing which is the choice of discovering small molecules required in the program. Traditionally, small molecule toolbox

within the pharma setting contains compounds that are more biased towards enzymes than on PPIs and pathways. In

Enzymes Vs Protein-Protein interactions



most cases, these compounds also lack the general features that are commonly found on bioactive natural products, such as 3D architectures, and, rich in chiral display of functional groups etc, functioning on pathways.

4.0 Translational chemical biology: need for new collaborative working models!

There are two prime reasons to explore new research models in drug discovery (see Figure 5), and these are: (i) as discussed above, the traditional pharma collection of small molecules contains compounds that lack the features commonly found in bioactive natural products that are known to function as the modulators of PPIs and signalling pathways; and, (ii) in general, most pharma expertise resides in the classical drug discovery approaches with a focus on kinases, phosphatases and other enzymes. The development of a phenotype or pathway-based screen-ing program is still in its infancy within most or several pharma groups. With an in-depth look at the current limitations covering both points within the pharma community, it is becoming apparent that these bottlenecks can be taken care-of by working closely with the academic groups. Outlined below are some of the advantages that would allow taking care of these two short-comings.

The need for a good starting point as the functional small molecule is the crest of the chemical challenges. The growing interest in undertaking PPI or pathway-based targets is challenging the organic synthesis and medicinal chemistry community to develop novel approaches that allow a rapid generation of small molecules inspired by bioac-tive natural products or hybrid natural products. The goal here is to build the next generation chemical toolboxes with compounds that have 3D shapes, present sufficient molecular complexity from the medicinal chemistry point of view and are more close to a wide variety of bioactive natural products. To meet these challenges, the academic commu-nity has developed several path forward

approaches, and, some these include: Diversity-Oriented Synthesis (DOS), Biology-Oriented Synthesis (BIOS) and Functional-Oriented Synthesis (FOS). In all these approaches, the long-term goal is to access a new generation of small molecules that are obtained through the inspiration from bioactive natural products. Because these new synthesis efforts are highly demanding in the meth-odology development, and, at present, mainly practiced in academic labs, building collaborative working models with the relevant academic community is not surprising. So is the case for the phenotypic or pathway-based cellular screening. From the past several years’ observations, it is now clear that several academic labs across the globe have estab-lished an outstanding expertise in this domain that requires working on very high risk projects involving identifica-tion and understanding the nature of the biological targets. One of the key

features of the translational chemical biology model is that it allows obtain-ing a thorough understanding of the biological target by an extensive use of biophysics tools, such as, protein NMR, X-Ray, SPR etc.

Exploring some of these demanding and high risk research areas by working closely with the academic community, it is indeed possible to develop next generation path forward approaches within the drug discovery arena. Cities such as Boston, San Diego, Montreal and Toronto have shown tremendous advan-tages in embracing these new research models. Specifically, Boston leads the way in embracing new research models (for example, Research at the Broad Institute of Harvard and MIT) and, in building a new research culture that has strong roots in academia and the pharma sector. A recent contribution of US$650 million as the philanthropic donation to Broad is the true testimony. It would be nice to

Figure 5

Translational Chemical Biology Model

Organic Synthesis

Novel Chemical Toolbox

Natural ProductsNatural Product-inspiredHybrid Natural Products

Cell Signaling Biology(Biological Questions/Novel Assays)

Cellular AssaysZebrafish AssaysOther Organisms

Biophysics and Structural Biology

SPRProtein NMRComputational Tools



see efforts like this in a country like India, who are aspiring to be a powerhouse in building ‘knowledge-based economy’.

5.0 Embracing New Directions: An Example in Cancer ResearchIn this section, we outline an example of a translational chemical biology model and its utilisation in embracing a new direction in cancer research (see Figure 6). In addition to the toxicity issues, one of the major problems with cancer drugs is their inability to control the growth/re-birth of cancer cells over a period of time. In the past several years, it has been shown that there is potential to overcome this problem if we are able to design small molecules that are highly selective in killing Cancer Stem Cells (CSCs). The lack of an ability to kill CSCs by most anti-cancer drugs leads to cancer cells formation and this then leads to metastasis. Until very recently, it has been shown that it is possible to identify novel small molecules that are highly effective as selective killers and these compounds in combination with the traditional anti-cancer drugs appear

Figure 6

Emerging Direction in Cancer Research

Why understanding and selective killing of cancer stem cells

is important?

OpinionTackling the cancer stem cells - what challenges do they pose?

See: Nat. Rev. Drug Disc. July 2014

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A scientist by profession, Subhadra dravida led global stem cell research and commercialization initiatives in regenerative medicine and drug discovery domains for over 12 years. she holds over two dozen patents in the field of regenerative medicine and has significant expertise in converting promising research into business opportunities.

PhD (1985) from the university of Delhi and PDFs at Cambridge and McGill, Prabhat worked at the National Research Council (NRC) of Canada for nearly 20 years; and also, had a short stint at the Ontario Institute for Cancer Research (OICR) to help build the medicinal chemistry program.

to be a promising path-forward approach. Once again, through developing novel cancer stem cells-based phenotype screens either in cells or in zebrafish combined with a novel chemical toolbox having natural product-inspired and hybrid natural products provides an excellent opportunity to practice working with

new models to reach highly unique drug candidates that may prove to be more effective than the traditional anti-cancer drugs.

6.0 SummaryAs we have seen for the past several years, the current practice of drug discovery seems to be a losing battle and not much has come out to benefit the society that is desperately looking for next generation effective medicines at an affordable cost. We are hoping that through embracing some of these new research working models and build-ing like-minded teams that are a nice blend of skill-sets from academia and pharma sector would allow reaching the objectives that are not possible to be achieved with classical working models. A challenging task is to build teams to undertake high-risk research programmes, and, this requires a deeper understanding of the need of so called ‘collective competence’. Only time will tell, whether, climbing this mountain would lead to a productive path that the patient community would benefit from, and this remains to be seen in days ahead! All references are available at www.pharmafocusasia.com



Validation Projects in China This article is a firsthand account of the experiences of Pharmadule in guiding leading Chinese manufacturers through facility investment projects aimed at compliance with Chinese, uS and Eu GMP requirements. These manufacturers have been among the first in the world to fully embrace the work procedures outlined in iCH Q8, Q9 and Q10. implementing these guidelines in large organisations would be a challenge with any global market, but it turns out that the Chinese market offers both advantages and cultural disadvantages when managing change.

magnus Jahnsson, Director Regulatory Affairs, Pharmadule Morimatsu, AB swedendaniel nilsson, Director GMP and Validation services, Pharmadule Morimatsu, ChinaErik Östberg, Project Validation Manager, Pharmadule Morimatsu, China

Between 1997 and 2000 Pharmadule built a number of pharmaceutical manufacturing facilities in China

for both domestic manufacturers and multi-national pharmaceutical compa-nies, including Eli Lilly and AstraZeneca. The multi-national companies required GMP compliance and validation services comparable to the level that exist today. The facilities delivered for Chinese manu-facturers would comply with international GMP requirements; but it became evident at that time that the Chinese GMP regula-tion was immature in comparison with the EU regulations and guidelines. In 2011, all of this changed when China launched the new GMP regulations which elevated the requirements to a level equivalent with international cGMPs.

At about the same time, Pharmadule refocused the strategy towards the Chinese market and has since then

MANUFACTURING


a decade or more to fully implement in a multi-national pharmaceutical company in the EU or the US are accomplished in a matter of months.

In recent assignments completed by Pharmadule in the Chinese market, the philosophy described by international regulators in ICH Q8 – Pharmaceutical Development, Q9 – Quality Risk Management and Q10 – Pharmaceutical Quality System have been seamlessly integrated with the concepts of Process Validation as described in the FDA Process Validation Guidance from 2010 and ASTM E2500 - Standard Guide for Specification, Design, and Verification of Pharmaceutical and Biopharmaceutical Manufacturing Systems and Equipment. Other international standards have also been taken into consideration in order to create a state-of-the-art Validation Master Plan. This Validation Master Plan governs the entire product and process life cycle (as shown in Figure1) and is used to manage all of the phases of an investment project. The main steps of this plan combine to form a control strategy allowing an unbroken chain of traceable verifications all the way from the product attributes (e.g., shelf life) via Quality by Design activities in the Process Design and scale-up, through design and qualification, all the way to process validation. This level of traceability is rare even with established international companies.

Implementing a new QA culture and a new paradigm for process validation has of course not been an altogether easy task. There have been a number of obstacles, some obvious, some less so. But there have also been circumstances in China that enabled the shift.

Key observations It was a positive surprise to find that the degree of process understanding was very high among engineers, comparable or even exceeding western expectations. This can probably be attributed to the effectiveness of the Chinese education system. However, this process understanding was rarely

fully leveraged into the process design and the GMP documentation. With the right tools and training, process understanding could easily be transcribed into Critical Quality Attributes, Critical Process Parameters and ultimately risk-based control strategies. Defining these boundaries and limits for the process in Quality by Design work has been both efficient and accurate. Quality by Design also facilitated, and eliminated unnecessary aspects of Technology Transfer, since Process Design departments, Operations and QA worked closely together. An impediment that could slow down changes is that within the Chinese culture, there traditionally is no challenge to authority. This puts a cap on the capability of innovative thinking and creative solutions. Corporate culture in China rarely encourages coworkers to take risks and explore new solutions. In fact, many companies punish employees that take risks and fail, with public shaming and fines. It is, therefore, important to note that, in contrast to the engineers, operators in the facilities do not have the same level of training as their western counterparts and will not take own initiatives. They normally only speak Chinese and will, for the reasons stated above, follow the SOPs they are given very rigorously. When training operators, this must be taken into account.

Turning process understanding and Quality by Design into User Requirement Specifications is a challenge that is not unique to Chinese manufacturers. International companies also regularly fail in this area. The sheer number of process engineers, support from management, detailed instructions and a flexible approach to change, allowed rewriting of the URSs to enable traceability of critical parameters and aspects. Revamping the URSs has consequently been easier than expected. This is a key activity in providing the foundation both for procurement and for the rest of the validation activities (In the new draft

been carrying out Validation, Quality Management Systems, GMP compliance improvement, and design projects in China. Compared to the projects in the late 1990s, assignments recently undertaken required Pharmadule to consider a number of significant changes in the Chinese marketplace when designing a modernised approach for project execution in China and other emerging markets.

One major difference is that while European and American pharma manufacturers typically have a QA/QC-force amounting to up to 40 per cent of the production staff, the Chinese companies we have encountered have very small QA/QC-departments, mainly focusing on QC and batch release testing. Quality is typically tested and validated into the products and processes. Interestingly enough, these immature QA and QC practices partially enable the transition to modern validation planning and execution.

The reason is that, in contrast to the multi-national pharmaceutical companies Pharmadule has worked with, over the last 25 years, Chinese companies do not have bureaucratic and over-compliant Quality Management Systems and validation frameworks. Rather, they could be characterised as non-compliant with EU or US regulations. This is of course a concern when it comes to the current level of Quality Assurance expertise. However, our Chinese clients have been very open to embracing new ideas and knowledge, allowing them to evolve faster than any other market where Pharmadule has worked in the past. Organisations offer little resistance to change, provided they understand the benefits and the details of the new approaches. Consequently, implementation of new business processes can be much quicker than in Europe and the US.

When a new facility is being built, it provides the manufacturer an opportunity to completely change the approach to Quality Assurance and validation. Changes that would take half

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Annex 15 to the EU GMP guidelines, URSs are specifically highlighted as part of the validation process). In China there is an additional challenge that increases the importance of URSs.

Traditional Chinese vendor management pushes all the responsibility for design, commissioning and qualification — up until at least Operational Qualification — on the equipment vendors. Audits and contract management have not been common practices. On the contrary, maintaining good relationships between business parties is considered so important that relationships sometimes supersede written agreements. If the supplier is to play a big part in the qualification, as is the intention (such as in ASTM E2500) then the supplier must initially undergo an audit to ensure that they are able to provide risk-based documentation, next get a URS that allows them to write risk-based documentation and finally communicate during the design phase to ensure an understanding and alignment with the risk-based principles needed. This has been and will be an area that needs attention from the validation team.

As a project moves closer to the next step in the life cycle, Process Validation (referred to as Process Performance Qualification in the latest FDA guideline), the state of the Quality Management System becomes much more important. This represents both a practical and cultural change for the Chinese pharma manufacturing industry. Quality Management Systems have traditionally been focusing on how to achieve the product specification in accordance with GMP and Pharmacopeia by extensive end testing of products and intermediates. Process Validation has frequently consisted of three batches, tested in accordance with the product specification as defined in the registration file. There is no scientific basis for specifying the number of validation batches to three, and while this practice may still be acceptable in the EU, there is a movement in the US

implementing a new QA culture and a new paradigm for process

validation has of course not been an

altogether easy task. But there have also been circumstances in China that enabled

the shift.

Currently the industry in China is waiting to see how the Chinese FDA will interpret and enforce the new GMPs from 2011. This may seem to be long overdue since now over three years have passed since the regulation was launched, but the CFDA recognised that the new requirements were setting a completely new standard for the industry and gave a grace period until January 2014. This year a large number of sterile and aseptic manufacturers are being inspected by the authorities. It has been recognised that while central CFDA has been very strict in their interpretation, China is an enormous country and it will take time for the new interpretations to trickle down to the provincial CFDA inspectorates. Therefore, the industry is still awaiting the outcome of local inspections. This gridlock will probably remain for the rest of 2014 and well into 2015. If the CFDA is enforcing the new GMP as vigorously as they have announced, there will surely be an increasing demand for new equipment and facilities, but the main demand will be new well-documented and improved Quality Management Systems.

Many of the leading manufacturers are not waiting for the results of the first real CFDA new GMP audits, but have instead chosen to aim for compliance with EU GMPs for their current project portfolio. This might even be the case for projects without objectives of exporting to the EU, but is rather done to be able to set up strict quality objectives for their projects.

Conclusions Our recent experience suggests that leading Chinese manufacturers not only have adopted the Quality by Design approach, but that they also fully appreciate the regulatory implications as well as the business drivers in implementing enhanced process understanding.

In applying Quality by Design and Risk and Science-based approaches, the Chinese are in some regards better equipped to manage the changes of the

on to a more science-based approach. Extended testing i.e extra tests outside the product specification to obtain an even more robust verification, an expected practice in the EU and US has not been the normal practice in China either.

One of the main advantages of risk and science-based validation is that it provides a control strategy based on residual risk after process design and equipment qualification. This control strategy is an input for the Design of Experiments for process validation batches that provides a scientific rationale for the number of batches and defines the extended testing needed. Control strategies also help define appropriate programmes for continuous process performance monitoring i.e. Continued Process Verification. In order to achieve this goal there is a need to implement a Pharmaceutical Quality System including a number of elements that traditionally have not been prioritised. Change Management, Deviation Management, Supplier Management, Continual Improvements and Product Quality Reviews are examples of activities that need to be implemented not just in the documentation, but also in practice. This is a major cultural change for most Chinese pharma manufacturers.

MANUFACTURING


organisations that this brings, due to the lack of quality history. Since there is a lack of understanding regarding the extent to which the new CFDA GMP will be enforced, and the similarities on paper between EU and the new Chinese GMPs, many leading manufacturers aim for compliance with EU GMP in current projects. While the industry as a whole is still behind EU and the US in terms of cGMP compliance, the gap is decreasing, and it is decreasing rapidly. In a not too distant future, Chinese manufacturers are likely to catch up and even surpass EU and US manufacturers both in terms of compliance and quality performance. However, China still has issues with management, leadership, innovation and creativity that are slowing the pace of the development down for the time being. Changing this probably presents a bigger challenge than implementing new industry regulations and guidelines.

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magnus Jahnsson has more than twenty years’ experience from the pharmaceutical field, both from the industry and from regulatory authorities. He has worked extensively in the fields of R&D, manufacturing, QA and regulatory affairs and has held positions with AstraZeneca, european Medicines Agency and Pharmadule.

daniel nilsson has more than 15 years experience from the (bio) pharmaceutical industry spanning all different areas of validation and QA work, and management consulting, for multi-national and Chinese manufacturers. He lives in China since 2012. Daniel holds a Master’s degree in Chemical engineering from the Royal Institute of Technology in stockholm.

Erik Östberg has 8 years of experience from the Life science industry and has worked for many multi-national manufacturers. He is specialised in management of complex validation projects. erik lives in shanghai since 2011. He holds a Master’s degree in Biochemical engineering from Chalmers university of Technology in Gothenburg, sweden.

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Quality by Design A rapid and systemic approach for pharmaceutical analysis The article presents a novel approach to applying Quality by Design (QbD) principles to the development of analytical methods. Common critical parameters in HPLC - gradient time, temperature, pH of the aqueous eluent, and stationary phase - are evaluated within the Quality by Design framework. it is useful for the robust analytical method development and Design Space optimisation.

m V narendra Kumar talluri, Assistant Professor, Department of Pharmaceutical Analysis, National Institute of Pharmaceutical education and Research, Hyderabad, India

INFORMATION TECHNOLOGy


The first step is to define the intended purpose of the analytical method. This has been called the Analytical Target Profile (ATP). The ATP is the set of criteria that defines at what level the analytes are measured; and accuracy or precision of method in which matrix analytes are estimated or over what concentrated range. After the identification of ATPs, proper analytical techniques are selected based on the defined ATPs, for example, for impurity/stability profiling of drug, HPLC is more reliable technique other than GC or UV techniques. The method under development will then follow a risk assessment which is the 3rd step in method development. All parameters, starting from sample preparation to end of the method (data analysis) are studied during risk assessment. Parameters which have more influence on critical quality attribute (CQAs) are found out to construct the design space. CQAs are the responses that are measured to judge the quality of the developed analytical methods, for example, total analysis time, peak tailing, lower limit of detection or quantification, resolution of critical pairs, precision of the analytical method which are the critical quality attributes for chromatographic methods.

Quality by design (QbD) is defined in ICH Q8 (R1) guidelines as ‘a systematic approach to

pharmaceutical development starting with pre-defined objectives with an emphasis on product and process understanding control’. Within the pharmaceutical industry there is increasing discussion about the principles of QbD analytical methods. For many years, analysts used to develop a method based on trial and error approach. With this traditional approach, many unexpected results are observed during the stage of validation in chromatographic methods (HPLC/GC etc) including the disappearance of a few peaks or appearance of new peaks creating a need to go back from starting of the method development steps. This approach is very tedious and time consuming and it cannot give robust

results. This can be avoided by applying Quality by design (QbD) approach. The degradants (impurities) can be separated (or quantified) using chromatographic techniques which can be tuned by many variables and all these variables can be optimised by QbD.

QbD has been initiated since 2002 and in Jan-2013 was fully adopted in the pharmaceutical industry through several regulatory initiatives such as FDA’s cGMP for the 21st Century (Figure 1), and the new regulatory documents, ICH Q8, Q9 and Q10. Initiation of QbD concept by regulatory authorities has sparked several publications in this area. In QbD approach, many statistical tools are involved like Design of Experiment (DoE), Multivariate Analysis and six sigma methodologies. Since last decade the number of publications increased every year based on the experimental design in chromatography.

Quality by Design steps for analytical method development To begin the development of a QbD acquiescent analytical method and finally reach the definition of its Design Space (DS), a total of four steps need to be completed as illustrated in figure 2.

History Of Quality By Design implementation process

FDA launched new concepts such as QbD, design space

Guidance on process validation

Full implentation of Qbd January

2013

PAT initiatives-recurrent

theme as QbD

cGMP for the 21st Century: A Risk based Approach by

FDA

FDA issued guidance

clarifies the QbD approach to processing human drugs

Figure 1



After completion of risk assessment step, design space is built up by considering all the parameters which are affecting the critical quality attribute.

A key component of the development of analytical method using QbD is what has been called the Design Space (DS) which can be generated through experimental design. The main benefit of defining design space is that a flexible area can be determined in which regulatory post-approval change permission would not be required. As per the ICH Q8 guidelines, design space is defined as “multidimensional combination and interaction of input variables that have been demonstrated to provide assurance of quality”. A DS term in chromatography can be explained that all variable parameters (Column chemistry, pH, Organic solvents etc.) which are strongly affecting the retention and selectivity should be simultaneously studied and defined the multidimensional design space. A key benefit of using DS is that all parameters are studied in combination so that interaction effects can be estimated. DS can be generated by using the experimental design. DoE provides a successful, well-organised approach to evaluate simultaneously the effects of factors and their interactions to predict the relationship between these factors. An experimental design is an experimental set-up to concurrently evaluate a number of factors at a given

number of levels in a predefined number of experiments. Many experimental designs are used for identification of most influencing factors (Table 1).

Rapid LC method development by Quality-by-Design The rapid HPLC method development by QbD is carried out in two phases. The first phase involves column screening, sometimes referred to as column scouting. Column screening is the experimental work done to identify the analytical column with the best selectivity in terms of all compounds in the sample that must be resolved effectively. Traditionally, column screening used to be performed by keeping other parameters like pH, Organic solvents, temperature constant. Such an approach gives minimum space and interaction effect cannot be

determined because columns behave differently at varying temperature, pH and gradient slope. As shown in Figure 3, the two-parameter design space must be duplicated for each column included in a column-screening study (ex: six columns), because it cannot be assumed that the parameter effects observed with one column will hold good for other columns. Keeping this in mind, new QbD associated rapid column screening approach has been initiated using many statistical tools.

When any analyst start column screening work, a question about which columns need to be screened among so many arises in his/her mind. Columns are selected as per the snyder’s dendrogram having different grouping of columns as per their selectivity. Columns which are having different selectivity are chosen during screening phase. The assortment of columns having different selectivity, organic solvents are selected based on the type of LC method: normal or Reverse Phase (RP). Mainly RP-LC is most preferred mode for method development in the pharmaceutical analysis.

Acetonitrile, methanol and tetrahydrofuran are mostly used reverse phase organic modifiers. Among them, acetonitrile is most widely used because of its low UV cut off and low viscosity, followed by methanol. The mobile phase pH can be a major factor that drives the selectivity of the method due to differences in the pKa of compounds. Usually, acidic conditions are the primary

QbD Steps in Analytical Method

Figure 2

How much Accuracy

or Precision Required?

Such as HPLC, GC,

uV or others

Find parameters affecting on

CQAs

Facors affecting on methods

E.g. Column type

Temperture, pH, etc for HPLC

Analytical Method implementation

identify Analytical Target Profile

Select Suitable Analytical Method

Risk assesment

Design space

Figure 3

Design Space - Example

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Column 4Column 3Column 2Column 1

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Design spacepH:2-7 and % Organic

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Experimental design Description Design

1. Factorial design

1.1 Full factorial design

1.2 Partial factorial design

The workhorse of DoE, factorial designs iden-tify experiments at every combination of factor levels. There are Lk combinations of L levels of k factors.

In full factorial designs (see Fig. 4) every experiment is performed, while for frac-tional factorial designs a specific subset is performed

Initial screening phase this designs are used

2.Central composite designs Designs that permit greater numbers of levels without performing experiments at every combination of factor levels cover the factor space near the centre with more points than at the periphery.

It combines a two-level factorial design with a star design and centre points.

For final optimization phase this designs are most preferred

3.Box–Behnken design A Box–Behnken design has three levels or more and can be applied to problems having three or more factors.

This is fewer than the central composite design and for three factors the same as the Doehlert design.

4.Doehlert designs Doehlert designs, unlike central composite and Box–Behnken are not rotatable, i.e. they can give different qualities of estimates for different factors.

However they are very efficient and have different numbers of levels for different factors.

Thus factors that are considered more signifi-cant can be measured at additional levels.

5.D-optimal designs D- Optimal designs are attractive more popu-lar and are particularly useful when the factor space is not uniformly accessible, maybe when combinations of solvent composition and solute concentration are not possible.

Another useful aspect is that the number of experiments is specified. These must be the minimum required to calculate the coefficients of the effects model.

In the given figure (2-factors and 9 runs) lower right triangle of the design is not accessible.

6.Mixture designs A special kind of design is used when the factors are constrained by having to total some constant value. For example, in chro-matography a mobile phase has components that total 100%.

Mixture designs address this issue. Three factors that sum to 100%, for example metha-nol, acetonitrile and water in a mobile phase fix one the components when the other two are chosen.

Table 1

3- Level 2-Factor Design

2- Level 2-Factor Design

Types of Experimental Design



choice for the RP-LC for both acidic and basic analytes. Under these conditions, acids are non-ionised whereas bases are ionised. Particularly for bases, an advantage of using low pH mobile phases is that the silanol groups are not ionised, leading to a more favourable peak shape for basic solutes. For LC-MS, volatile buffer is primary requirement for mass spectrometry compatibility.

After deciding different columns, pH and organic modifiers, screening phase

Method Development Workflow By QbD

Phase-1 Column and solvent screening

Phase-2 Method Optimisation

Meet all the requirement

Defined the design space for following factors1. Column types 3. pH2. Organic solvent type 4. Gradient time

Generated the experimental design

Run the various design on the instrument

Generated the trend response model

Keep the phase-1 factors constant and change the temperature, gradient slope and flow rate

Generated the experimental design for optimisation and predictive model

Result: optimised method and robustness

No

Validationyes

Figure 4

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bio m V n Kumar talluri has a broad pharmaceutical experience in

analytical activities in drug discovery, development and quality control, such as method development, specification design, regulatory documentation, etc. He has published 60 articles in his credit. He is recipient of CsIR-Research fellowship, Institution of Chemists Associateship awards.

generated using software like drylab, fusion, unscramble, ACD labs etc.

The phase-1 or screening phase- ‘columns and solvents screening’ experiments identified the best columns, pH of mobile phase and organic modifier to use in the next phase of method development or optimisation phase. Once these parameters are identified, next phase of optimisation involves the manipulation of remaining important instrumental parameters like temperature of column or flow rate to meet the all performance requirements. The QbD methodology also includes robustness as integral part of method development.

ConclusionThis article highlights the application of Quality by Design principles to the analytical (HPLC) method development process. A marriage of HPLC with QbD is suggested for rapid and robust method development, understanding factors influencing chromatography, easier transfer of the method through proper documentation. The use of various modelling software programmes allowed a limited amount of experimental data to be used to examine a large number of probable run conditions. Once the optimum run conditions and their tolerance to change were predicted, experiments were run to confirm the predictions. This data in the future can on the one hand serve as a common medium of discussion between analysts and regulatory bodies and easily and quickly diagnose any problems which may be encountered during the lifecycle of the method.References are available at www.pharmafocusasia.com

(phase-1) starts using experimental design (figure 4). Experimental design can be


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Crippled by Cost? CMO Quo Vadis

introduction: The global CMO market is said to reach USD 40.7 billion by 2015. Patent expiry of drugs, stringent price regulations (especially in Europe, US) to purchase drugs from pharma companies, Government budget cuts for pharma R&D – these are the forces which are expected to reshape the future of pharma and the CMO industry. At least 100 manufacturing facilities owned by pharma companies were shut down in the US alone in 2013 due to reduced profits. Global biopharma companies are looking out ways to reduce costs. Efforts to reduce fixed costs have forced the pharma companies’ march towards the alternative ‘Outsourcing’, thus promising increasing opportunities for CMOs and CDMOs in future as well. Emerging markets like India, China and Latam are turning out to be the favored destinations for outsourcing in the future.

Synopsis: This whitepaper showcases how CMO market is expected to shape up across different dosage forms, best practices among the CMOs to meet the demand of pharma companies and strategies that can be adopted by CMOs to stand out in the market. Recommendation: Industry consolidation in the CMO/CDMO market in the form of mergers and acquisitions, implementing lean management principles in manufacturing process and innovating technologies across dosage forms would help CMOs sustain in the markets.

arun ramesh, senior Research Analyst, Beroe Inc., India

WHITE PAPER


Market overview

1. Solid Dosage CMO MarketThe solid dosage CMO market is expected to grow at a CAGR 10 to 11% by 2017, with emerging market players driving the market. Some of the reasons why solid dosage would still dominate the non-sterile market are.

Lack of manufacturing challenges when compared to other dosage forms•Inventions of new technologies (e.g. OptiMelt, OptiDose) to improve the bioavail-•ability of the drug by Catalent and other leading CMOs is expected to drive the solid dosage marketDelayed/Sustained Release, Multiple control release tablets are expected to gain •momentum in the solid dosage market

2. Injectable CMO MarketInjectable has been on the forefront of sterile manufacturing. The injectable CMO market is expected to grow at a CAGR of 11 to 12 % by 2017.

There is an increase in demand for parenteral drugs. This is driven by the growth in biologics which has in-turn created great demands for capacity. Unlike solid dosage, the preferred destinations for injectable would be developed markets. Major CMOs have expanded their capabilities in the past and are still doing so, to cater to client’s requirement.

Source: Expert data

Source: Expert data

WHITE PAPER


to acquire other companies using their stock and add new capabilities. With CMOs consolidating and moving into the era of end to end service, it would potentially benefit pharma companies’ outsourcing. The illustration below shows the consolidation of top CMOs globally.

2. Manufacturing Optimisation(Case Study: Pharma Company 2010)The objective of the company was to reduce cost and improve productivity

Increasing Competition From Emerging Market PlayersAs illustrated below, pharma companies are looking to outsource solid dosage manufacturing to emerging markets like India and China and sterile manufacturing to developed markets.

Road ahead for CMO industryHaving spoken about the trends in outsourcing and the CMOs’ initiatives to sustain in the market; adoption of cross industry practices and cost effective

Source: Corporate Websites of above mentioned companies

Pressure on Profit margin Traditional CMOs phase out

Constrains

CMO market is fragmented •with top3 players holding 5% market share. Hence there is an immense pricing pressure on the CMOs thereby impacting their proft margins.

Though the revenues of •major CMOs have increased considerbly (6 to 7%), the profit margin (2 to 3%) has not significantly increased in 2013

CMOs manufacturing •trational dosage forms such as tablets are pressurized on sustaining their profit margins.

CMOs who do not have •adequate working capaital to upgrade themselves with the latest trends. These CMOs will eventually be phased out of the market thereby driving industry consolidation.

Source: Expert data, Corporate Annual Reports (Catalent, Patheon) Source: Expert data, Nice Pharma

CMO Market Constraints

manufacturing processes would also benefit CMOs.

1. CMO ConsolidationCMO consolidation is progressing in the form of strategic alliances, acquisitions and divestures. Some of the significant strategic acquisitions are Patheon & DSM, Haupt Pharma & Aenova in 2012 and Par Pharmaceuticals & JHP Pharmaceuticals in 2014. Companies like Catalent & Recipharm are expected to be public and this showcases their financial stability. This would also enable them

WHITE PAPER


Source: Business Case by MIT

Source: Business Case by MIT

implementation results

WHITE PAPER


from the existing sites. The case explains how continuous production process was implemented in place of batch process so as to achieve productivity and reduce costs

The case involves two Chemical synthesis plant and a warehouse which were integrated to a single manufacturing site where API synthesis and drug formulation (coated tablets) was performed.

Total capital investment involved in continuous production was 40% less compared to the capital investment made on the batch production process. Depreciation is considered during the calculation.

Source: Case Video from Corporate Website of above mentioned company

Thus considering continuous production, savings on total product cost per kg of coated tablets involving 14 steps of chemical synthesis and drug product formulation was calculated to be 28 to 30%Case Study - Lean management: CMO (Fabbrica Italiana Sintetici) (2013)CMO adopted lean management principles and achieved results with increase in productivity and reduction in set-up time, process time and loading time. This practice was calculated for a specific product. Below are the results after implementation

Implementation resultsCatalent has been implementing lean management principles during manufacturing from 2011

Some of the concepts used by Catalent:

DRM (Daily Routine •Management)Visual Management (Control Boards, •5S, Metrics)Kaizen•

Thus implementing Lean management principles in manufacturing, provides significant results and the CMOs could immensely benefit from the same.

implementation results

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3. CMO InnovationsWith demand for drugs growing at a faster rate, CMOs have to upgrade themselves with advanced technolo-gies and innovations to sustain in the competitive market. Quality and cost management being major concerns, the contract manufacturers should adopt best practices like continuous manufactur-ing process and lean management to achieve improved productivity and reduced cost. For example, tablets are one of the conventional manufacturing techniques and profit margins of the CMOs are being squeezed. In addition to it, there is an increasing competition from India and China.

Therefore, major CMOs are looking to retain their customer base through a series of technological innovations. Major technological developments have aimed at improving the bioavailability and effi-cacy of drug, thereby attracting pharma companies for outsourcing.

Illustrated below are some of the tech-nological advancements by top CMOs in solid and sterile dosage categories

Pharma-CMO business model evolutionIn the early stages pharma compa-nies engaged with the CMO only for commercial manufacturing on FFS (Fee For Service) basis. In the next five years the pharma-CMO business model would shift to a phase where the pharma company would look for full end to end contract services (from formulation devel-opment to commercial manufacturing) from the CMO. Illustration below shows the evolution of engagement models. Medium and emerging pharma compa-nies are engaging with major CMOs such as Patheon, Catalent, Recipharm etc. across drug value chain. In future, big pharma would also engage in end to end partnerships. Below are some of the business models cases

CDMO Models – The FuturePharma Companies have started

engaging with CMOs, where the CMO provided end to end service starting from formulation development to commercial manufacturing of drugs

For e.g. In 2013, Followed by a successful multi-year development and clinical manufacturing partnership for oncology drug Imbruvica, Catalent signed an agreement with Pharmacyclics for formulation development, clinical and commercial manufacturing of drugs

In 2014, Alkermes develops and commercially manufactures drugs for J&J (Drug: Invega Sustenna – to treat schizophrenia), Alkermes also has similar partnerships with King Pharmaceuticals, Novartis, Abbott, Par Pharmaceuticals etc.Milestone based modelThis model aids the client to monitor the progress on a regular basis and make payment based on achieved milestones


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Almac’s technology and IP to develop validate and commercialize a multi-gene test to predict the benefit from DNA damage-based chemotherapy drugs. As per the agreement, Almac received an upfront payment of USD 9 million and further additional milestones based on clinical and commercial goalsCollaborativeCapacity ManagementAs per this model the CMO expands or builds a dedicated a facility for the pharma client to meet the demand of the pharma company

E.g. In 2013, Aesica built a dedi-cated facility worth USD 48 billion as a production hub for oral type 2 diabetes, for one of its strategic partners. The site also includes complex device assembly and specialty packaging and manufacture of high-potent productsCollaborative Cost Reduction modelPharma Company and the CMO work together on cost reduction and the cost savings is shared between the parties

E.g. In 2014, Patheon and Sepracor signed an agreement to develop cost reduction initiatives as part of the over-all cost improvement program. As per the agreement, all net cost savings (net of implementation costs) realized from the cost Improvement program shall be shared equally between the parties

Future of outsourcingThe key future trends in CMO industry are

CMOs with conventional dosage •forms will become a low profit generating avenue. Integrated CMOs and CMOs with unique capabilities will eventually be the market driversCMOs in developed market will focus •on sterile manufacturing. Ability to handle high cytotoxic compound will be added potential advantageIn solids, CMOs need to innovate •new delivery technologies and adopt

an improved manufacturing process in order to drive their business. Potent tablet manufacturing will also gain importanceCMOs will look to expand their •existing relationships by offering an end to end service from development to manufacturingEmerging market CMOs will become •the preferred sourcing destination for tablets and capsules in next 3-5 years.

Disclaimer: Strictly no photocopying or redistribution is allowed without prior written consent from Beroe Inc. The information contained in this publication was derived from carefully selected sources. Any opinions expressed reflect the current judgment of the author and are subject to change without notice. BeroeInc accepts no responsibility for any liability arising from use of this document or its contents.

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Source: Expert data Beroe Analysis

industry speak/acknowledgement

CEO of a pharma companySolid and Sterile categories are expected to drive the CMO market through 2017

Business Development Manager of a pharma companyTechnological Innovations and best manufacturing practices are key trends in the CMO market and the CMOs have to upgrade themselves to stand out in the market

Head of CRAMS division in a pharma companyThere will be a stiff competition from emerging markets. India, China and LATAM are expected to be the drivers in emerging markets for solid dosage outsourcing and developed markets would still lead sterile outsourcing with their technological expertise

au

th

or

bio

arun ramesh is a senior Research Analyst with Beroe Inc., a global provider of customized procurement services specializing in sourcing, supply chain visibility, financial risk analysis and environmental impact to Fortune 500 organizations.

Arun Ramesh specializes in tracking the pharmaceutical contract manufacturing market in the formulations vertical, analyzing the engagement models therein,

and assisting big Pharmaceutical clients with their procurement intelligence. He has worked on multiple projects for Fortune 500 clients on categories such as sterile and non-sterile formulations in the animal and human health categories.

Arun Ramesh earned his degree in MBA (Operations & Marketing) from the ssN school of Management in Chennai.

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To receive more information on products & services advertised in this issue, please fill up the "Info Request Form" provided with the magazine and fax it, or fill it online at www.pharmafocusasia.com by clicking "Request Client Info" link.1.IFC: Inside Front Cover2.IBC: Inside Back Cove3.OBC: Outside Back Cover


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Pharma Focus Asia Issue 21

Healthcare

Transcript of Pharma Focus Asia Issue 21