Investing in the Customer
While we all know that the contract manufacturing segment of the pharmaceutical industry has been growing exponentially over the last few years, what might not be known is the length and breadth of the services that many pharmaceutical contract development and manufacturing organizations (CDMOs) can provide. Some may only offer development or scale-up services; some only production services; some might not have the physical capacity to manufacture your product in the volume you need; some might not offer the service you desire – the shepherding of your product through development all the way to commercial manufacturing.
Norwich Pharmaceuticals is one such company that can do it all, they offer the services and physical plant assets to take your product, no matter what stage it’s in; and work with you to develop that product into a commercial success.
The Norwich Story
Situated on 440 acres in the town of Norwich, NY in the Catskill Mountains, the company dates back to 1887, but the current 375,000 square foot facility was built in 1976 by Norwich and operates primarily as a solid dosage manufacturing facility. In 1982 Norwich was acquired by Proctor and Gamble. In 2001 Proctor and Gamble decided to get out of the pharmaceutical business and sold the company to the conglomerate - Outsourcing Services Group (OSG).
In 2007 AFI Partners, a holding company for Alvogen bought Norwich. Very shortly after this, in 2008, Norwich Pharmaceuticals began to make some serious investments.
According to Terry Novak, Norwich’s president – the investments are not purely financial. “One of our ‘themes’ here is our investments; and I don’t mean just money. We are investing to succeed as a company by investing in our facility, our equipment, our people, our customers and the community in which we operate.”
According to Novak, from 2008 through 2012, Norwich will have invested over $40M in the company’s assets.
Beginning in 2008 the company created the Pharmaceutical Development and Technical Services (PDTS) division. In 2009 the pilot plant facility came on-line and in 2010 the company launched a clinical services division with operations located in New Jersey and Bangalore, India. A rare asset for a CDMO.
“What we want to achieve for our customers,” says Novak, “is unsurpassed quality, safety, compliance and customer service.”
Norwich's strategic capital investments such as packaging technology upgrades
(shown above) and pilot scale manufacturing equipment (below) enable a flexible
production environment that is preferred by customers.
Novak continues, “Our customers cover a broad spectrum – large pharma, mid-size, virtual and a fair amount of specialty companies. Mainly because of the size of Norwich specialty companies are drawn to us.” They are also drawn to Norwich due to their expertise in many different technologies. For example, Norwich has the capabilities to do many special and unique projects – such as mini-tabs, laser drilling, tablet in tablets, tablets in capsules – that other, larger CDMO’s might not offer.
Indeed, as Dr. Bob O’Connor, the company’s Vice President of the PDTS division notes, “We have the footprint here to do special things and some suites are dedicated to certain companies. If someone comes with a special technology, we can build out a special suite for them. Because of the space we have we are able to invest in our customers.”
Product Development & Technical Services
Norwich’s development and pilot scale facilities are located within 8,000 square feet of DEA approved, potent compound capable space that also contains two laboratories dedicated to support R&D and GMP development projects. In 2012 the pilot scale facilities will more than double in size with the addition of 12 new suites.
These facilities are strategically designed and equipped to provide solid dose manufacturing technologies in both R&D and GMP environments. The facilities, equipment, and technology mirror Norwich’s commercial capabilities; allowing direct transfer from analytical to quality control, and enabling a fast track to commercial production.
“I don’t think a customer could walk in here with something unique that this team would not be able to take on,” says O’Connor.
These broad capabilities, technologies and the company’s experienced staff allow the them to take virtually any product that comes in the door from a Phase 1 product in development to a tech transfer - optimize the formulation, and then run feasibility, validation, and registration batches.
Norwich recently opened a clinical services division and the company now
covers the full range of contract services for pharmaceutical development and
manufacturing. The company indicates that specialty pharma is particularly
interested in a comprehensive offering that allows for a single provider throughout
the entire process.
In the R&D and pilot facility the company offers both non-GMP and GMP areas. This set-up affords some very tangible benefits as Jeff Rudy, Norwich’s Senior Engineer, Technical Services, explains, “We get formulations at all different levels of maturity. Sometimes customers have done quite a bit of trials on similar equipment or they have done nothing but table-top doses and have not run their compounds through a real mechanical tablet press and don’t have a real feel for flowability or uniformity – so in this space we can get them going quickly in a non-GMP realm. The non-GMP space is very important (to us and our customers) because it boils down to the issue of governance. In the non-GMP space we are more governed by QA oversight – but the principal scientist can direct the experiments either out of a structured lab notebook or batch records.”
He continues, “The key is that because the space is non-GMP doesn’t mean it’s any less precise. The equipment is still qualified and calibrated to an equivalent GMP degree. One of the big freedoms we have in this area of the facility is under equipment hygiene. We can clean the equipment under our own internal SOP without the need for a cleaning validation step. This allows us to work with compounds that are coming into the facility very quickly and allows us to get information to the customer very quickly.”
In the development area the use of portable equipment is an important asset as is the capability to quickly reconfigure rooms based on product testing and developmental needs. “We like to have a space where we can bring in small portable blenders, tablet presses, milling or roller compaction equipment in one space, says Rudy. “We are set up architecturally to have single unit operations in spaces to have custom process trains – to allow us to specialize in shorter customer runs.”
To ensure that personnel, customers and regulatory agencies are aware of the transitions from non-GMP to GMP zones within the facility, Norwich has worked very hard to make it architecturally very clear where you are in the facility. Transitions zones are abundant in the facility where gowning is done and the sophisticated HVAC systems ensure there is a positive pressure “bubble” between hallways and GMP areas.
“Our core competency is making solid dosage products,” says Rudy, “but hand in had with that is facility design – we have been very cognizant of all the requirements that all the regulatory agencies are looking for. They are very particular about facility design.”
Indeed, for a solid dosage facility, Norwich has taken a very detailed approach to eliminating contamination.
“We have taken fit and finish and cleanability to a higher level,” says Rudy. “But there are reasons behind that. We want to work on compounds as soon as possible.”
He continues, “We want to be able to handle new compounds, compounds without a lot of data – and if we don’t know what they are, they are immediately classified as potent - until we have some data. We have set this space up with single-pass air, which is not required for solid dosage R&D and pilot production, but we want to be able to handle those compounds as early as possible.”
To that end, there is no recirculatory air, thereby eliminating cross-contamination. In the event of a catastrophic event everything is contained and can be decontaminated without impacting the rest of the facility.
Commenting on the facility’s design, Rudy offers, “It’s a necessity for us.”
Perhaps the centerpiece of the PDTS area of the facility is its full GMP solvent coating space which offers very flexible and scalable coating pans housed in a room that has been outfitted with explosion–proof electrics.
“Functional coatings are sometimes a big part of a client's product,’ says Rudy, "whether its tablet coating or bead coating."
The company has done small tablets that have been coated with different functional coatings and has put different tablets in given ratios into capsules. They have equipment to put tablets into capsules, they can do mini-tabs, which are smaller than a small tablet and coat those and put those in a capsule.
“There’s not much that would scare us off," says O’Connor.
From Pilot to Production
As mentioned, in order to offer a seamless transition from the product development area to the production area – Norwich offers equipment and technologies which are easy to scale-up. At its most basic this means you will find the same brand of, or very similar, equipment in the production area that you found in the product development and technical services area.
According to Rudy, the initial Norwich facility was built to manufacture a blockbuster drug and even though it was built for a specific process – they have engineered in a large degree of flexibility.
Most processes in the commercial manufacturing area are processed using a tote system. Product is milled and blended in a tote – which is then transported to a compression area or capsule filling and closing area. Tablets are then moved to a coating area – and then finally to a packaging area. In particular, the packaging area offers four solid dosage bottling lines and one blister packaging line.
Process strategies, such as Lean Six Sigma and Foreign Trade Zone status,
are opening new strategic opportunities for Norwich that include packaging
and distribution to global markets.
The commercial manufacturing capabilities of Norwich have gone through several transitions in the last ten years as the company has transformed itself from a division of Proctor and Gamble to a full-fledged, full-service CDMO.
After the divestiture in 2001 of P&G, the company went through a period when it was manufacturing P&G’s legacy products and doing some contract manufacturing in custom suites, which were almost completely customer-dedicated. In this manufacturing scenario a customer funds the refurbishment of a manufacturing suite solely for its own product.
According to Rudy, up until about 2003 the company’s business model was making custom engineered spaces for a product – since then they have leveraged these spaces for other needs.
Commenting on customer-funded manufacturing suites, Rudy says, “While we are not against that – customer-funded capital which results in a long-term contract to build, support, operate, maintain and manufacture a project – we are now looking at these opportunities as way to build higher-level partnership with our clients.”
Regarding the company’s manufacturing capabilities, Rudy continues, “We try to have in-house capabilities for all types of projects ready to go – but it really speaks to the fact that we are good at the curve balls of the industry – if someone has a very unusual dosage style we are adept at supporting that.”
“It’s becoming increasingly unusual for a company to take a product from incoming formulation development all the way through its lifecycle. Other companies are missing some of the pieces that we have.” Rudy concludes.
The pharmaceutical industry is no longer confined by constraints of distance or country borders. Innovator pharmaceutical companies are setting up operations everywhere to be closer to their customers and to take advantage of local economies. Contract manufacturing companies are no different and to remain competitive need to explore every option available to give them an edge. Norwich is no exception to this rule.
While they have invested heavily in their operations over the past few years, they are also exploring a rather unique angle to differentiate themselves from other CDMOs – they are looking to establish themselves as a foreign trade zone.
Norwich’s Steve Kondracki, the company’s Vice President, Supply Chain has been working on certifying Norwich’s facility as foreign trade zone – and he’s almost there.
But why would a CDMO want foreign trade zone status? There are advantages as Kondracki explains, “For companies outside the pharmaceutical industry the main reason for setting up a foreign trade zone is to delay payment of duties and reduced tax implications. But for the pharmaceutical industry it’s different.”
Kondracki explains that with a foreign trade zone designation a company like Norwich can bring in product and work on it, within the boundaries of the zone, with complete knowledge of all regulatory agencies. The main advantage is that the company doesn’t have to go through a lot of the hurdles of clearing a product in through the FDA and Customs.
Kondracki offers an example of the benefits, “If you are manufacturing a product that is pending approval, and your bulk material is coming from India. You can’t bring that into the country until it’s approved by the FDA with what they call a “letter of eminent approval.” Basically the FDA let’s you bring in an approved product right before launch. Quite often that timing is unknown – which can be a guessing game.”
"So under a foreign trade zone, if we have a customer who says we are having a bulk material manufactured but we want you (Norwich) to package it, or maybe add a final coating step or package it. We can bring the product in and the FDA, Customs and The Department of Health all know the product is here. We can bring it in here – we are free to work on, do the qualification of the packaging line, we are free to do all those things. The product can’t leave here until it’s approved, but now once you’re all done and the approval comes – you can launch immediately to the US market. And now you can start bring in bulk here and packaging it because you have filed all the necessary paperwork.”
“When we look at our markets now, we have a better chance to say to the European market we can make you product in upstate NY – we have that capability – this is the benefit we see in a foreign trade zone.”
The Primary Focus: The Customer
Most companies have many different types of customers – some are internal and some are external and some may not contribute directly to the bottom line but nonetheless need to be served.
Terry Novak, the company’s president, knows this all too well and while he will say that investments in the company have been done to provide his company’s customers with the best pharmaceutical development and manufacturing experience possible, he knows who the true customers are “We focus on the customer and the patient – the ultimate customer.”