Advertisement
Articles
Advertisement

Who or What Killed QbD? And is there hope for resuscitation?

Mon, 06/13/2011 - 8:01am
Girish Malhotra, President, EPCOT International

LISTED UNDER:

The title of the article in itself is provocative. Many have presented a “Quality by Design” (QbD) definition. Any process that is completely controlled (operating parameters and flow rates) and produces quality product without any intermediate product sampling and analysis in my definition would be considered a QbD process. Such a process will have the highest profitability and sustainability. My definition is based on chemical engineering principles.
In the pharmaceutical industry the US FDA promoted the concept of QbD and PAT (Process Analytical Technologies) in 2001. QbD has been since discussed feverishly and there are claims that its implementation is moving forward1. However, there is no confirmation of these claims. The question still persists “Is there a hesitation for QbD?”
This article explores the following.
1. Why are we hesitant to adopt what works for other manufacturing industries?
2. Why are we hesitant to explore other options?
3. What is standing in the way of “doing the right thing?”
4. Is there hope? 


If the answers to the above questions were simple and obvious, I would not be writing let alone discussing it. However, the answers are in front of us but not very obvious.
Pharmaceutical businesses have been able to achieve their profit margins and revenue growth. Stakeholders and financial analysts are satisfied with the results. Thus, the need to implement QbD methods has not been necessary. Since the growth and profit fete is achieved under regulatory circumstances that are perceived to be the most stringent, complacency against change has been the way of life.
Revenue retention, profitability and growth pressures are there and increasing as many drug patents begin to expire (2) in the next five years. Pharmaceutical companies are exploring and enacting different strategies for their continued growth and profits. It would be beneficial if we compare the pharmaceutical business against other businesses that have faced similar challenges and have survived and are flourishing. Key to their survival is a change in their business model and technology innovation.

girishtable1

Comparison of Pharma Ingredients and Specialty Chemicals
Many families in the real world are made up of “haves” and “have-nots”. A good percentage of “have-nots” learn to use their "street smarts" and can compete extremely well in almost any business situations. “Haves” due to being born with a silver spoon and inherited money can develop arrogance and consider themselves invincible. Usually “haves” have a happy life but often lack competitive and combative spirit especially when “have-nots” begin to challenge their supremacy.
Pharmaceutical and fine/specialty chemical businesses are cousins. I believe the two fit the above-described motif well. Active pharmaceutical ingredients of a drug are fine/specialty chemicals that happen to have a disease curing property whereas most of the fine/specialty chemicals generally have utility value for the masses. Except for the molecule’s disease curing property the DNA of both businesses are similar. The methods of chemical transformation are the same or similar. Different organic chemicals are reacted under appropriate reaction conditions to produce a product that is purified to the desired level of quality. Solvents that are used also come from the same closet. The processing equipment and methods are essentially the same.
Even with all of the above similarities there is a significant difference between the two classes of businesses. The differences are in the way of product quality and its repeatability. Execution of business practices is different. Why did this separation come about is a question that has been addressed by others but is worth a re-visit.
Since fine/specialty chemicals are not for internal human consumption, they do not have to comply with the regulatory requirements that pharmaceutical companies have to meet. Fine/specialty chemical businesses like pharmaceuticals have to comply with safety, health and environmental regulations. They do not have any other encumbrances except for fierce competition. They compete on the basis of innovation.
Chemicals that are for human consumption have to meet regulations set by FDA and regulatory bodies of the countries where the products are sold. During a patent’s life the inventor companies, except for a similar molecule from other inventor companies, do not have any competition from generic companies. Since the drug pricing is not based on factory cost of API or the formulated product but based on what the market can bear, the need for manufacturing technology innovation does not exist. This is true even in the markets where the drug prices are regulated by governments.
Companies like juveniles do not like to be told what to do with respect to their manufacturing processes and product quality. Regulations controlling product quality consistency and repeatability are a must for pharmaceuticals and there is no way to get around them. Regulations are just guidelines. Due to product recalls, questions have been raised about the industry’s capabilities. Companies can implement methods that exceed guideline requirements. That capability comes from manufacturing processes that can be completely controlled.

Regulations, Quality and Current status
The US FDA was created in 1906 (3) to prevent interstate commerce in adulterated and misbranded food and drugs. Regulations have since evolved. To ensure traceability, a record of every action has to be kept. Record keeping has become the Holy Grail once the regulatory Gods bless the product, procedures and processes commercialized by the manufacturer.
Since quality is paramount for pharmaceutical products any change in process or method that would improve product quality or lower manufacturing costs also requires regulatory approval. Companies are intimidated and seldom want to change from what has been approved. After the processes have been approved the incorporation of changes is perceived to be a costly affair by the industry.
Based on review of citations for different pharmaceutical products and products recalls one can conclude that there are flaws in manufacturing processes and procedures. These failures need to be fixed as soon as they happen. Companies have to be proactive in having streamlined processes. Could these failures be due to a lack of command of the process?
If companies had control of their manufacturing methods and practices, many of the citations can be avoided. Actually many should not even happen. It is just bewildering why such incidents happen. Have the engineers and manufacturing personnel forgotten good practices or are they being prevented to do the “right thing”?
Some of the manufacturing mishaps, like marketing products above and below the approved specification range, should have been caught through good quality control and accounting practices. Material variances should show up in cost and profitability deviations. Since these off-spec or contaminated materials are marketed and not recognized until the FDA or other regulatory bodies or the companies identify these incidents, it is an indication of not only a failure of good manufacturing practices but also failure of good accounting and management practices at the companies. Companies have banked on product recalls as a remedy for these incidents. Recalls are not sufficient deterrent for marketing of “off-spec” products. A company’s management has to be criminaly held accountable for such situations.
I believe that for some reason unknown to all of us, pharmaceutical manufacturing processes are failing to meet the minimum regulatory standards. I am not sure of the basis of the regulations but they definitely do not seem to be based on science-based considerations. Had they been science based they would have promoted manufacturing innovation. Everyone wants to deliver quality products but regulatory gyrations (e.g. meeting different pharmacopeia standards from the same site) add to a company’s challenges. Even with the regulations that are not science based companies have delivered quality products. It has been done through repeated analysis of the intermediates and the final products. Cost containment is not an issue as they are passed on to the customers.

Why are pharmaceutical Companies hesitant to adopt what works for others?
Pharmaceuticals (brand or generic) are profitable barring missed opportunities. They need to be innovative in their development and manufacturing. Any suggestions to improve their product, process development and manufacturing technology innovation has not been necessary as costs associated with every inefficiency are passed on to the customers. In addition, the API and formulated drug factory costs are a minor percentage of the average wholesale selling price, thus the inefficiency costs are totally camouflaged. QbD hesitation comes from the belief of “if it is not broken, there is no need to fix it” and regulatory re-approval is too costly and will lower profits.

What has worked for the fine/specialty chemicals or other industries?
The chemical industry has gone through a transformation to re-invent itself in the last 30+ years. Fine/specialty chemical companies in the developed countries have competed heavily against each other. Companies from the developing countries have challenged them (haves and have-not scenario). Consolidation and re-alignment has given them new life. One interesting and beneficial lesson of the competition has been that they have developed manufacturing technologies and methods that have allowed them to compete in the toughest environments. Fine/specialty chemical companies (have-nots) have benchmarked and invented technologies (i.e. street smarts) based on their education and desire to excel. A “Can do” attitude has been their salvation.
Re-balancing is still continuing. As the global consumption landscape changes, companies from BRIC (Brazil, Russia, India and China) and other developing countries are not sparing any industry.
“Creative destruction" has been the mantra of the industries that faced challenges that are now being faced by the pharmaceutical companies. They re-invented themselves and flourished. Steel, telephone, textiles and now the automobile industry have embraced change. Dr. Joseph Schumpeter’s simple idea of Creative Destruction (4,5) is: It is a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.
Pharmaceutical companies are trying some of the strategies that have worked for other businesses. Can they work for the branded pharmaceuticals is anyone’s guess. They are paying significantly much higher acquisition multiples than necessary. Fine/specialty chemicals went through a similar spending spree and it resulted in over capacity. Since the capacity could not be utilized, they eventually sold these plants to generic API producers on the cheap.
Brand pharmaceuticals will have to be very careful with how they proceed in their acquisition and divestiture strategies. Biotech is considered a viable opportunity but would the drugs be blockbusters or marginally better than the existing drugs. My conjecture is that the odds of inventing low cost high utilization drugs are going to be equally elusive as they has been with small molecules.

Are there options to explore?
My point of the above discussion is that these industries altered their business models to meet changing global demand. Pharmaceuticals have global demand. Their model has been to invent, market and disband the created molecule as soon as the patent expires or is invalidated or the product life cycle extension strategies are not profitable. They have also capitalized on the life extension desire of consumers by setting prices at the highest-level they can afford.
We should benchmark pharmaceutical active ingredients to their closest cousin - fine/specialty chemicals. Many of the answers would be obvious. Formulations do not have a close relative but many of the chemical engineering principles apply and should be our guide along with good manufacturing practices. By “good manufacturing practices” I do not mean 21 CFR or ICH guidelines but common sense science based practices that allow us to do the right things.
Process equipment and production volume are taken for granted for the production of any active pharmaceutical ingredient (API). However, they are a critical part of the API manufacturing process especially for the volumes related to smaller dosages. For a drug of 0.5 milligram dosage and one billion dollar annual sale at average wholesale price of one dollar per tablet, the total need for the API would be about 625 kilograms per year. This volume is small for any single plant to produce. Imagine this API being produced at three plants and they each have to produce the active to meet three different phamacopeia standards. If this were true, each plant would at best produce about 42 kilograms per year per pharmacopeia standard.
Production volume of the above API per batch is so small and it can pose challenges even for the pilot plant. It is very possible that the pilot plant equipment size might still be too large for the process. If this is the case, the process will be modified to fit in the equipment. As the API volume per site decreases economies of scale disappear quickly. Process inefficiencies increase. Process unsustainability increases. Since different products will preceed and succeed this API, equipment cleaning and record keeping becomes more important than having the optimum process. This pretty much describes the current state.
Drug (API) volume, dosage, wholesale price and number of sites relationship are illustrated in Table 1. This is a hypothetical case. Sales of one billion dollars per year, i.e. a blockbuster drug, are used in the illustration. Formulation efficiency of 80% is assumed. As the API volume per site decreases the complexities of record keeping, equipment cleaning and asset downtime increase. This can result in more cleaning/idle time per site than the time that might be needed to produce the API at each site. Poor asset utilization results in costs increase but since they are passed on to the customer, the need for an optimized process does not exist.

Is there hope?
Yes there is hope as has been seen with different businesses that have floundered e.g. steel, auto and chemicals. They changed and are changing. The entry of generics in pharmaceuticals will force the change if the brand model does not change. With expiring patents branded pharmaceutical companies need an extreme makeover. The pharmaceutical business model has to be altered in totality. Until this happens the current state will persist. Change has to happen and if it does not happen some company that is not in the pharmaceutical business will change the landscape.
To have QbD processes everyone associated with pharmaceutical companies needs to consider the following.
1. Single global pharmacopeia standard.
2. Single or minimum sites for API and the formulated drug.
3. Process equipment that is the right size for the product.
4. Develop and manage processes that have accountability, repeatability and exceed regulations and guidelines set by FDA and other regulatory bodies.
5. Regulations that are followed by the pharmaceutical companies need to be reviewed and have to include science based thinking to foster continued innovation.
Convenience and emotion based manufacturing has to be replaced by science based manufacturing. The survival of companies that produce APIs and formulate drugs depends upon incorporating QbD methods.

References
1. Fuhr, Ted: State of QbD Implementation: Adoption, Successes and Challenges, Drug Information Association, June 2010
2. Big Pharma Patent Expirations To Sock 2012 US Drug Sales http://online.wsj.com/article/BT-CO-20110215-707831.html accessed Feb 25, 2011
3. US FDA history http://www.fda.gov/AboutFDA/WhatWeDo/History/CentennialofFDA/CentennialEditionofFDAConsumer/ucm093787.htm
4. Schumpeter, Joseph. Capitalism, Socialism, and Democracy. Harper Press, 1975, pp 82-85
5. Greenspan, Alan. The Age of Turbulence. Penguin Press, 2007, p 48

Girish Malhotra is the president of EPCOT International (www.epcotint.com) and can be reached at girish@epcotint.com

Advertisement

Share this Story

X
You may login with either your assigned username or your e-mail address.
The password field is case sensitive.
Loading