The market outlook for parenteral contract manufacturing finds itself caught between two versions of the immediate future. One scenario looks at new cancer drugs and the considerable number of biologics in late-stage testing and predicts a parade of new products, the equivalent of on-the-red-carpet attention and spiraling, higher demand. The other, frequently described by the CMOs themselves, sees steady increases over the next few years from several contributing areas, with figures more in line with the segment’s traditional, modest rates of growth. Tom Polen, senior director of marketing at Baxter Biopharma Solutions, points to the driving trend of the outsourcing of previously approved molecules, and sees growth in approved molecules from 31% to 35% by 2010 – an estimate that was exceeded. The pharmaceutical industry recently invested billions in parenteral capabilities, pushing the market valuation to over $802 billion by the end of 2029. He also sees a major change in orientation. 

“Companies are focusing more on driving strategic differentiation,” Mr. Polen told Contract Pharma. “We’re seeing the end of these blockbuster drugs. It’s more and more difficult to find that billion-dollar plus drug. So companies are investing more and more into R&D pipelines to find that valuable molecule. They’re investing more into sales and marketing to build strategic differentiation. In the pharmaceutical industry, manufacturing is not something that, when you invest in it heavily, it creates strategic differentiation. Companies are choosing to divert that money from fixed assets and manufacturing, and reinvest that money into the pipeline or sales and marketing activities.”

When a predilection for reinvestment in other areas becomes combined with the influence of regulatory scrutiny, outsourcing becomes an attractive choice for companies of every size and shape, from virtual companies to large pharmas. The majority of CMOs we spoke to for this article claimed a wide variety of clients. Further, outsourcing parenteral manufacturing is a decision that may become even easier if pressure from regulatory agencies grows in the way most expect. Steve Meeker, director of site development, Bayer Health Care, commented, “I think the availability of the provider in the industry is really on the decline, and I think the regulatory requirements and the enforcement of those known requirements are going to increase.”

Nearly every CMO we contacted to discuss the industry, the regulatory pressures, and trends in services provided agreed that outsourcing parenterals should enjoy a general increase that will continue to benefit in particular established companies serving this market. Many feel that existing CMOs in this market—some with years and some with decades to perfect their basic services under the scrutiny of rigorous FDA and client audits—stand to benefit from a round of conservative but deliberate infrastructure improvements in the first half of the decade. In fact, those benefits are beginning to be enjoyed right now.

Said Dr. Juergen Koch, one of the managing directors of Vetter Pharma, “Many pharmaceutical companies do not have the resources necessary to manage the increasing complexity of filling parenteral substances. The processes to fill such  substances require a level of expertise and experience that can only be provided optimally by the core competencies of a specialized manufacturer. Considering the risks during product development—namely, the risk that a product won’t reach the commercial stage—in the long run, it makes no sense for a company to build up that expertise within its own walls.”

He added, “A CMO can really accelerate time to market because of its experience with numerous different substances and their individual composition and requirements. A full-service provider can relieve pharmaceutical companies of the filling burden and such necessities as lifecycle management. For example, we have the capacity and flexibility to quickly transfer a drug from one administration system to another to react to market demands.”

Key Drivers Of Parenteral Manufacturing

Every vendor confirmed that, in addition to recent increases in outsourcing within parenterals, the trend has been toward increases in parenterals as one of many contract manufacturing areas in the pharmaceutical sphere. Among the reasons offered:

1. The difficulties of investment in infrastructure, which is not only substantial in terms of cost but in the number of areas that need to be supported. Said Mr. Meeker, “You also want to keep in mind the environmental monitoring, the testing of the waters, the air sampling and stuff like that. That’s a big infrastructure cost. You can’t be in this business and farm that stuff out. You need that infrastructure; it has to be there. Our parenterals area, in our facility, we’ve invested around $15 million. Incrementally, you’ve got to put a solid portion of that into laboratory environments to do the necessary testing.”
2. The rise in demand for pre-filled syringes, with its attendant technological needs. Tony Cacich, vice president and general manager of Contract Manufac-turing Services at Hospira, explains this is a combination of molecule type and ease of use: “We’re seeing with the biologic and biotech drugs more of a need to have those in a pre-filled syringe delivery. I think it offers a certain amount of convenience, and administer those in different arenas, not just the hospital.”Claudio Tracanna at Hyaluron stressed that this should be seen less as a brand-new market and more as an expansion of existing business. “You are going to get some pre-filled syringe parenterals that are taking the place of currently filled vial jobs. When clients know what their final dosage is, they can go directly to the syringe. You’re going to capture some syringe work that would have been vial, but with the availability of the pre-filled syringe now, it broadens people’s options, so that definitely increases.”
3. A shift to biologics among new items working their way through the pipeline. One CMO estimates that 30% of growth in contract manufacturing comes from previously approved molecules, and 70% from new. A significant percentage of new items in the product pipeline are biologics, and, as they remind, “virtually all biologics are parenterals.” Mr. Cacich said that, in terms of his company’s interest in the contract manufacturing of parenterals, “there’s a lot of development in the biologics and biotech areas, and those drugs are typically not stable in solutions. You see them in a lyophilized form and also in small syringe aloquats, and we’ve been trying to service that part of the industry.”
4. Working with large molecules brings with it specific technological needs that would favor outsourcing in an area Mr. Meeker terms an “augmentation” of most providers’ core businesses. Baxter’s Mr. Polen explained, “Biologics have very different needs than small molecules. They’re much larger, they’re more delicate and you need different processing methods to keep them from shearing and becoming damaged.” He further noted that Baxter’s degree of investment includes an array of commitments to different areas: “We have brand-new lyophilization and vial-filling lines going up, which we’ve designed exclusively for biologics. It has special pumps that prevent biologics from being sheared. You can refrigerate the entire room and manufacturing process to keep sensitive biologics at very specific temperatures during the entire manufacturing process. This is something very unique that you would never have in place for the small molecule.”
5. Project BioShield as both a surge of new business and a portent of increasing company-by-company traction in specific areas. Of the CMOs contacted by Contract Pharma, HollisterStier was by far the most vocal in terms of relishing its level of success with developing business from Project BioShield, a federal effort announced in 2003 to develop and stockpile vaccines against chemical, biological and pathogen weapons of terror. Rick LaPointe, vice president of operations at HollisterStier, notes that his company’s relationship to vaccine makers goes back to its signing of the company Bioport in early 2001: “We then existed in eyes of the DOD/DHHS and NIH, so they were familiar with our capabilities. That paved the way for other companies who were targeting project BioShield grants and national stockpile types of scenarios.” This has led to HollisterStier doing business with as many as six other companies. Business building on business is a common refrain among the CMOs.

Regulatory Pressure

Photo courtesy of  Vetter Pharma-Fertigung GmbH & Co. KG

Given the tenor of the pharmaceutical industry, it should come as no surprise that if there’s one overarching factor on every CMO’s plate concerning parenterals, it’s regulatory concerns. Even in comparison to other areas, each CMO described FDA interest in parenterals as severe and focused. “There’s obviously been heavy FDA scrutiny on parenteral manufacturing because it’s so critical,” said Mr. Polen. “You’re taking these drugs and injecting them right into the body. There’s no barrier, like when you take something orally. So the FDA really has a high degree of scrutiny when it comes to parenteral contract manufacturing.”

Mr. LaPointe described a typical year at HollisterStier in terms of expected attention to its parental manufacturing facilities: “We expect to have 48 audits this year alone, from 48 different companies. And then we’ll have an FDA inspection, and then some PAI inspections, all in one year. That repeats from the previous year.” One CMO laughed off preparing for inspections as a non-factor, given their frequency and unremitting, year-round presence.

Parenterals In Japan

While FDA pressure is on the rise, it’s a decrease in regulatory pressure that may be helping open up one market for the CMOs: Japan.  “We are seeing some changes in the Japanese regulatory environment, which is creating some new opportunities for the Japan market,” reported Mr. Polen. “They’ve changed policies and are now more open to having foreign contract manufacturers manufacture for the Japanese market. That’s traditionally not been allowed or encouraged. It’s just an opening up of Japanese government and society.” Mr. LaPointe remarked that HollisterStier had its first Japanese inspection at the end of March, while Hospira’s Mr. Cacich concurred, “We are seeing some increased activity from the Japanese marketplace.”

Process Analytical Technology (PAT) Trends

All of the CMOs contacted by Contract Pharma expressed either an outright dearth of knowledge on how in-process techniques might be used to buttress the enormous number of end-run measures and tests, or a wistful desire that someday, someone might know. “In my opinion, parenterals are still behind in the overall PAT trend,” Mr. Meeker told Contract Pharma. “There’s too much risk. It makes sense; I love the concept. But I don’t know how to go about it, how to incorporate traditional PAT technology and the assurance that you get using PAT along the way versus the classical way of testing it at the end. With parenterals, you have to go back and do the verifications and everything within alignment to your validated methods through the process.

“It’s always plagued parenteral manufactures: how many times at the conclusion of the batch has the test method put your production into potential jeopardy, even after the energy that’s been put in to verify those test methods were conducted right, your standards were right, and the environments were right. It always falls back on product integrity. If we could incorporate some PAT on the way, you wouldn’t have to just rely on that end testing. I don’t see many people headed that direction.” Mr. Meeker contended that PAT will have a wider impact on parenterals once the first company implements it in a way that brands it as the market leader in this area, allowing for others to follow and play catch up.

This isn’t to say that no company is making headway in the PAT field. Dr. Koch at Vetter Pharma remarked, “Parameters like integrity of the packaging system, fill volume, stopper position and several others are measured online. Other factors, such as in-line measurement of residual moisture in lyophilized products, are still under development.”

One of the problems with applying PAT in this field is the very nature of the product. “There is a lack of in-line assays for complex biomolecules in aqueous solutions. One reason is for instance the low concentration of the new highly patented drugs. Therefore NIR, Raman, Ultrasound etc. are not suitable for this purpose so far. But we are definitely interested in applying PAT in our sites; the best means to control a process are reliable online data.”

Technology, Labeling & Generics

As befits a sector driven by well-established (and well-regulated) companies, some of the technological changes are taking several years to arrive. According to Mr. Tracanna, Hyaluron has benefited greatly in recent months by marketing “disposable bio-bags” to its potential customers a replacement for mixing in stainless steel containers. The idea behind the bags is that they save the client the cost of clean-up costs and validation on containers once used; although having been around for several years, they have not yet become market standard because they incur a level of testing to make sure the material has not leached into the product. Other technological developments cited as potential market wedges in the near future are the capacity to provide for time-delayed injectibles, and silicon-free syringes.

None of the CMOs contacted by Contract Pharma suggested much happening in the areas of labeling that would specifically impact parenterals. Mr. Cacich explained, “There’s not a lot of activity now,

because distribution is fairly tightly controlled, with a lot of distribution through hospitals, so there’s a tighter control on the distribution pipeline.” He predicted, “I think what will happen is that companies will get things settled in terms of oral dosages and then that will move towards parenterals.”

Others expressed concerns that anti-counterfeit measures adopted on a state-to-state basis could lead to added cost. Mr. Meeker suggest that he would support any forthcoming ISPE guidelines on the matter as a potential new standard. Mr. Polen cautioned that the industry’s attention should be focused somewhere other than counterfeits. “The more pertinent point right now for biologics is that people are watching the tend not necessarily counterfeiting but generics. We know that there’s a fair number of people investing in generic biologics and we’re actively and obviously awaiting the first ever generic biologic to be approved in the U.S. That should be an interesting trend to watch over the next several years,” he remarked.

“Right now, biologics have been a unique area in pharmaceuticals in the fact because they’re not chemically defined, they’ve been this area that large Pharma has been watching as potentially a way to have a very long lifespan,” he added. “If you can’t come out with something that’s chemically defined, you can’t come out with a generic type of approach. There are companies that are working on analytical methods to better define biologics and have started getting into the very late stages of development. There are several companies out there working on generic lovonoxes.”

Market Dangers

That last point—and the fact that biologics dominate the new product portion of the parenterals market—begs the question if there is any inherent danger in having this many products, any one of which that could fail late-phase testing and strike a serious blow to a company’s profitable use of resources.

While most CMOs express that effective planning will mitigate these sorts of concerns as best as any company is able, Mr. Meeker took the more aggressive stance that the criticism might be outdated, that the further along these drugs are in the pipeline, the better: “People building capacity for late-stage products and then all of the sudden they don’t materialize? Honestly I think if we interpret the trends correctly, I would have had that concern more three years ago than I do now. Some of these biologic-based drugs are actually coming to market, where three years ago there were onesies and twosies coming to market.”

Tom Spurgeon is editor at large for Contract Pharma. He can be reached at tomspurgeon@yahoo.com