Industry Insights Offered at DCAT Week '15

By Patricia Van Arnum - DCAT Editorial Director

March 25, 2015

DCAT Week '15 provided key insights in the global pharmaceutical industry and supply strategies for small molecules and biologics.

The education programs at DCAT Week '15, the flagship event of the Drug, Chemical & Associated Technologies Association (DCAT) that was held March 16-19 in New York, provided industry insight on the performance and outlook for the pharmaceutical and biopharmaceutical industry as a whole, perspectives from leading pharmaceutical companies on their supply and manufacturing strategies, and an update of important regulatory and industry initiatives, including the US Food and Drug Administration's (FDA) Quality Metrics Initiative as well as US and EU measures impacting the excipient supply chain. Detailed coverage of the presentations at the education programs at DCAT Week '15 will follow in upcoming issues of DCAT Value Chain Insights (VCI).

Graham Lewis, vice president, global pharma strategy, IMS Health, provided an overview of the global pharmaceutical market and the key trends impacting the market. An overall compound annual growth rate (CAGR) of 4-7% is projected to 2018, when the global pharmaceutical market is projected to reach $1.3 trillion. The United States and pharmerging markets, defined by IMS as the most promising emerging markets, are expected to account for more than 60% of sales and 80% of growth by 2018. On a product basis, key trends include a rise in innovation, marked by an increase in new molecular entity approvals in 2014 in the US, which included more specialized drugs, both orphan drugs and biologic-based drugs. In developed markets, oncology remains the top therapeutic area, a trend that is expected to continue through 2018. Reflecting the trend to specialty drugs, revenue growth for several mid-sized pharmaceutical companies is projected to be strong, making select mid-sized companies among the fastest growing in the industry, While innovation is a key driver for future growth, the extent of that growth may be constrained due to payer limitations and related pricing.

Another important barometer for future innovation and the health of the industry as a whole is the financing into the biotechnology/biopharmaceutical sector. Glen Giovannetti, global life sciences leader, EY, provided an overview of the financing trends overall and in the US and European markets. He pointed to several positive developments in 2014, including biotech's performance in the broader bull market, strong performance of commercial leaders (defined as companies with market capitalization of more than $500 million), and record-high financing levels in the US and European biotech sectors, including a sizable uptick in the number of initial public offerings in 2014 and 2013. Sanjay Sehgal, managing partner and CEO, East West Capital Partners, provided an overview of investment and valuations in select Asian emerging markets, notably India and China. And David A. Dunn, PhD, practice consultant, life sciences professional services, IP & science, Thomson Reuters, provided an in-depth analysis of the opportunities in the biologic-based drug market.

The overall market trends also influence companies' supply and manufacturing strategies, and several industry experts provided perspectives on their companies' supply strategies, addressing issues such as governance models, partnership strategies, performance metrics, risk assessment and evaluation, and supplier innovation. Providing insight were: Marielle Beyer, head, technical operations, procurement, Roche Pharma; Peter Lyford, commodity director, custom manufacturing, production procurement, GlaxoSmithKline; Craig Michael, director, API external manufacturing, Eli Lilly and Company; Bill Rich, vice president, external supply, Amgen; and Patricia Turney, executive director, external supply chain, Amgen. Offering specific insight into managing the biologics supply network were Maria Nieradka, senior vice president, global supply chain, Biogen, and Fred Jacobson, PhD, staff scientist and Kadcyla technical development leader, Genentech Inc., a member of the Roche Group.

As companies navigate the evolving pharmaceutical market and supply networks, they do so in strict compliance with standards for quality and good manufacturing practices (GMPs) in their internal and external manufacturing and supply networks. An important issue before the industry is the FDA's Quality Metrics Initiative, As announced in the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012, the US FDA is moving toward a risk-based inspection schedule. In support of and to strengthen this risk-based approach, the agency started developing quality metrics as objective measures of the overall quality of pharmaceutical manufacturing sites, and their products, processes and systems. Alex Viehmann, statistician at the Center for Drug Evaluation and Research / Office of Surveillance, Quality Intelligence Branch, US Food and Drug Administration, provided an update on the agency's Quality Metrics Initiative, the rationale for the program, and the participation of industry stakeholders in this process. Frances Zipp, president, Lachman Consultants and a member of the ISPE Quality Metrics Team, a key stakeholder in the Quality Metrics Initiative, explained the process thus far for stakeholder engagement, the considerations in defining the quality metrics, and implications for pharma manufacturers and suppliers. Offering insight on overall quality oversight and management when working with external suppliers were Mary Oates, vice president, global quality operations and EHS, Pfizer Inc., and Robin Jones, vice president, quality compliance,Teva Pharmaceuticals.

Another more specific area relating to quality are recent and proposed excipient regulations and industry programs focused on quality, risk management, supply-chain security, and supplier integrity, which were addressed in a separate program. This program examined how regulatory agencies and manufacturers of excipients and drug products are working to meet requirements under US and EU provisions, including the Food and Drug Administration Safety and Innovation Act (FDASIA), the European Union's Falsified Medicines Directive, and Guidelines on the Formalized Risk Assessment for Ascertaining the Appropriate Good Manufacturing Practice for Excipients of Medicinal Products for Human Use as well as the role of industry initiatives, such as the NSF/IPEC/ANSI 363 GMP standard for pharmaceuticals excipients and EXCiPACT. Offering insight were: William Dale Carter, global director quality, J.M Huber Engineered Materials Silica Business Unit and past chair of IPEC Americas; Dr. Frank Milek, head of GMP and SHEQ Operations, Aug. Hedinger GmbH & Co. KG and chair of IPEC-Europe; and David B. Klug, senior manager, GMP audit, Sanofi US and immediate past chair of IPEC-Americas.

And the education programs at DCAT Week '15 also addressed the future of the pharmaceutical value chain, looking at emerging tools, processes, and technologies, including digital technologies that are influencing the market. The program, moderated by Gurpreet Singh, partner and management consulting leader, Health Industries Advisory at PwC, looked at several key issues: how smart and mobile technologies are influencing pharmaceutical commercialization models (Nick Bonny, director, pharmaceuticals and life sciences, PwC); the role of crowdsourcing in external innovation (David Thompson, director of organizational engagement, Boehringer Ingelheim Pharmaceuticals, Inc.); and cloud computing in pharmaceutical manufacturing (Jerry Megaro, director of manufacturing analytics and innovation, Merck & Co., Inc.). Also, Timothy Jamison, PhD, principal investigator, Novartis-MIT Center for Continuous Manufacturing, and professor of chemistry, Massachusetts Institute of Technology (MIT), examined research being done to integrate both drug substance and drug product manufacturing under one continuous mode and the feasibility and challenges in transforming the manufacturing paradigm used in the pharmaceutical industry from batch to continuous manufacturing.

And to address a common area of interest among all companies, Mario Moussa, PhD, MBA, co-director, Wharton Strategic Persuasion Workshop, Wharton School, University of Pennsylvania, senior fellow, Wharton Executive Education; and president, Moussa Consulting, provided practical insight and strategies for successful collaborations and negotiations.

Detailed coverage of the presentations at the education programs at DCAT Week '15 will follow in upcoming issues of DCAT Value Chain Insights (VCI).