Two of today’s emerging markets in the pharmaceutical space, China and Ireland, continue to make a mark on the global market as a whole, while operating independently and excelling in diverse areas.
Although certain markets tend to dominate the news sphere, the pharmaceutical industry is truly a global one—with many countries contributing research, resources, and (ultimately) new drugs. However, countries continue to fight for dominance in the pharmaceutical space.
According to both the Association of the British Pharmaceutical Industry (ABPI) and World Atlas, the top three global pharmaceutical markets are presently the U.S., Japan, and China. ABPI reports that, as of 2013, the U.S. was worth approximately 340 million, with Japan coming to 94 million, and China close on its heels at 87 million. CPhI projects China, in particular, to reach $150 billion worldwide in 2016. The country currently covers 40 percent of global API production and is the world’s largest producer of pharmaceutical ingredients. By 2020, some experts predict that China will become the leading player in Asia.
But there are many more international markets that continue to emerge, bearing significant promise for the years to come. Ireland, according to IPHA, has plants from approximately 120 oversees companies, including nine of the top 10 big pharma companies. In addition, Ireland accounts for more than 50 percent of all exports and is the largest net exporter of pharmaceuticals in the European Union (EU). Twenty-five thousand people in Ireland are directly employed in the pharmaceutical sector, says McGee Pharma International, with an additional 25,000 providing “supporting services.”
Century 3 (C3), a full service project life-cycle engineering firm in China, and LotusWorks, engineering and technical service experts in the pharmaceutical supplier space in Ireland, participated in a round table with Pharmaceutical Processing to discuss how the pharmaceutical industry is impacted by their global market as well as where each of these markets is specifically excelling.
Li Yuan, PE, LEED AP, Vice President Director, Pharmaceutical Business Unit, Century 3, and Keith McElkearney, Key Account Manager, BioPharma, LotusWorks, participated in the round table. Their edited responses are below.
How would you describe the pharmaceutical climate in your country?
The state of pharmaceutical climate in China is moving in a very positive direction due to the many recent changes within the healthcare system. In recent years, China’s central government has been working hard to make healthcare affordable for everyone. The general idea is something similar to Obamacare in the U.S. As a result, the government is encouraging more investment in R&D and we have experienced an increase in job creation.
There is no question that the sheer size of the Chinese market and the number of potential patients who will soon be more participatory in the healthcare system is a big driver for pharmaceutical companies, both international and local. We are definitely seeing an increase in the number of biotech companies and the sense of urgency for international companies to keep up with that local competition is increasing. Over the past two years, companies such as Pfizer and AstraZeneca have done major projects here in China.
Our clients in pharma and biotech are very interested in new ideas and technology. Some of the cutting edge technology is very expensive; however, clients are still interested in how it works and seeing if it is worth an investment down the road.
Challenging. Most of the competition in this sector are from a client’s sister sites. The most efficient, competent sites are seeing the work migrate to their site as part of a global corporate decision. Therefore, each site wants innovation, pace, reliability so they can compete with each other.
How much of your country’s pharmaceutical climate is impacted by global operations?
China is being positively affected from Western influences and global operations. Over the past few years we have seen an increase in the amount of international pharmaceutical companies who choose to do business in China. And on the technology front, the government has been highly encouraging of biotech start-ups; Chinese residents may go oversees for education and then come back to China and start their own business in biotech areas, which the Chinese government encourages and supports.
We are seeing large investment in Ireland on the production sites due to the capability and capacity for growth on existing sites. The products are sold on a global market, so issues like the number of countries distributing the product as well as established products reaching the end of the patent can have an impact on the client and therefore on to us.
What are some of the upcoming innovations that are changing the way that the pharmaceutical/biopharmaceutical industry currently operates?
Many of the innovations in the pharma and biopharma industry are becoming very globalized. For example, all major companies are providing single-use disposables, and these trends are following those international firms into China.
Three innovations spring to mind. The first is the use of disposables; these items of hardware are reducing cost to the plant but in some cases need higher levels of calibration to ensure GMP parameters are still being met. The second are factories created in a modular design, which allows for retooling to be done very quickly and will let you repurpose an existing production system relatively quickly. Again this does need a more flexible approach to calibration. The third is automated condition monitoring. Instruments are getting smarter. They can now communicate to us when their health and will warn us when they are starting to fail. These are very useful reliability tools when working in the future industry.
What are some of the improvements being made to current pharmaceutical/biopharmaceutical products, services, or processes?
In 2011, the State Food and Drug Administration, P.R. China (CFDA) published the revised Good Manufacturing Practice (GMP) for Drugs, aka GMP 2010 Version. Since the new GMP requirements have been in place, all local pharmaceutical companies are making many modifications to achieve the standards set by the new requirements. International pharmaceutical companies already met these requirements because they are GMP requirement standards set by other regulatory bodies such as the FDA. But the type of quality standards imposed by the CFDA here is expensive to achieve, and (unfortunately) some small local companies went bankrupt or were acquired by larger companies because they could not afford to operate according to the new standards. Even some big companies decided not to renovate some of product lines to meet GMP 2010 after looking into the financial study.
Everyone is trying to build efficiencies into their processes. The investment in these factories is huge. When a new system is up and running and licensed product is being shipped out the door. Everyone is concentrating on how to produce more for less with no impact on quality. New technology is helping with this issue, either reducing downtime, bringing greater accuracy, or even making systems safer.
Describe the pharmaceutical regulatory body that you work with. What are some of the everyday challenges you face?
Century 3 is a specialized services company here in China—more accurately, we are a project/program management and design build company. Our mission is to provide engineering capabilities for clients in addition to helping them receive a manufacturing certificate for production so they can take their product to market. Century 3 provides these services for their clients because many don’t know how to apply for a manufacturing certificate. This involves a regulatory process with the CFDA and is often very time-consuming and involves a lot of paperwork.
Although this is beyond the services most companies provide, Century 3 recognizes that the end goal for all our clients is to get the certificate for production that is necessary for our clients to produce their therapy or drug. Since we know the market and the regulatory process, it only makes sense that we would consult with them on how to achieve goals that go beyond manufacturing, project management, and design/build.
Maintenance windows are a lot smaller now as production ramps up. We have to work smarter now. There is a significant effort put into planning. The work we do is critical in the client proving they are making safe and effective products time and again. Our training, equipment, and work all have to be aligned for the allotted window to do our work with no impact to the product or production.
What are facility inspections like? How can this process be improved?
Facility inspections under the Chinese FDA requirements are relatively stringent, which is very similar to the U.S. FDA requirements. Chinese pharma companies are weaker at being consistent with documentation and tracking all the regulatory changes. However, since the new GMP requirements imposed by CFDA, companies have been improving quite rapidly and are working towards global regulatory standards.
Facility inspections are a regular occurrence and nothing to alarm us. They are carried out internally or by external companies or countries and their agents. We have good systems in place. Everyone is trained in what they do. They know their responsibilities and work to the site GMP standards. There is nothing hidden.
What is one of the things that the pharmaceutical industry in your country is awesome at? In other words, where is the industry excelling?
The new healthcare system makes the industry excellent. Before, the direction of the pharma industry was a little unclear, but the new system gives the companies a clear direction of what you can sell to the patient and what doctors can prescribe, among many other regulations.
China’s government believes the biologic industry is going to be booming as a global trend—and, therefore, the government highly encourages the industry to do more. For example, the government is supporting startups and helps students from universities with funding/tax breaks.
I think it’s the flexible approach we can take as a country. We have history and experience here and use that knowledge to make the best fit for a client. We want to learn and use new technology coupled with experience to help make our sites world leaders within their company or their peers.
What are some of the key areas for opportunity and growth in the pharmaceutical/biopharmaceutical/biotech industry?
An area for growth would be for Chinese pharma companies to improve facility inspections and keep up with the CFDA and global requirements for shipping out of country. Globally, we would like to see the time to market improve. Right now, it seems as though the timeline is on a case-to-case basis. Our CFDA is working to shorten the timeline process and we look forward to this change here in China and within the global market.