What’s On the Minds of Biotech and Generic Drug Manufacturers in 2019?

Strong Growth, Speedier Approvals and Practical Innovation Dominate, Yet Shortages of Qualified Chemists and Raw Materials Continue to Raise Concern

While rising prescription drug prices hogged the headlines last year, pharma firms and Contract Development & Manufacturing Organizations (CDMOs) were busy working behind the scenes, developing Active Pharmaceutical Ingredients (APIs), New Chemical Entities (NCEs) and medical devices that are driving a new level of innovation in 2019.

From medical-grade polymers that provide new ways to deliver medicine to patients, to pharma foods to treat chronic diseases, this new year will completely transform how we develop and deliver new treatments that focus on personalized patient experiences and better outcomes.

In addition to working toward better outcomes, the race to deliver new innovation is driven by patent expirations on brand-name drugs, which are opening up new opportunities for generics to provide the same effectiveness in different forms and create a new market of healthy competition.

So being the first to commercialize new offerings in these areas will be of top concern for drug manufacturers in this new year; and their efforts just may be realized a little faster, as the FDA continues to speed up the approval process in the wake of high priced drug monopolies.

While easing FDA regulations, drug discovery and a robust economy are opening up new opportunities and optimism in the industry, in 2019 drug makers are increasingly becoming concerned with the ability to hire qualified scientists and source quality raw materials to keep pace with demand.

Below are five trends that will impact the industry in this new year:

1. Strong growth for CDMOs. There are a number of factors driving growth, including a robust economy; private and foundation money flowing into the sector; big pharma’s continued move to shut plants down; a shift to a more cost-effective outsourcing model; and the FDA speeding its drug approval process. That said, risk factors for the sector include: a fluctuating economy; a stock market that has seen wild drops; and increased consolidation among CDMOs.
2. Practical innovation becomes the watch word. Big data and artificial intelligence will help in drug discovery, but, along with continuous manufacturing, they’re all still in the early phases. Yet, batch manufacturing will continue to represent 99 percent of all pharma manufacturing. Advanced techniques like cryogenics, micronization, lyophilization and polymer-based drug delivery systems will see an uptick in demand as providers and patients look for more readily available, affordable and effective drug delivery and treatment options.
3. The U.S. and China will continue to rely on each other. Despite a trade war and tariffs between the U.S. and China, the two countries will continue to work together for their self-interests. China is a major low-cost supplier of raw materials used in drug manufacturing in the U.S., and manufacturers will continue to rely heavily on these suppliers to help them provide generics and small-batches of specialty drugs. Since the U.S. is a source of new lifesaving drugs that aren’t otherwise available in China, the Chinese will continue to approve record numbers of U.S.- based products.
4. Faster FDA approvals may lead to shortages of raw materials. GDUFA (Generic Drug User Fee Amendments) and GDUFA II, which extended FDA inspections of international manufacturers while also speeding up the approval process, may lead to a shortage of raw materials, which could hinder the availability of generics. As more and more generics are in demand, there may be a scarcity of raw materials required to produce them, which could lead to drug shortages and higher prices for raw materials and final products. Even if the FDA opens barriers to entry for generics, industry consolidation among big pharma, with deeper pockets and significant buying power, could make it tougher and more expensive for small generic manufacturers to acquire the necessary raw materials.
5. The shortage of qualified chemists will affect the industry. Two out of five Americans say the STEM worker shortage is at a crisis level in the U.S. The shortage of qualified scientists to fill all areas of chemical research, development and manufacturing will be one constraint on growth and productivity this year. When it comes to encouraging students to pursue STEM education, many look to computer coding but what the industry must do is find ways to work with educators and policymakers to encourage careers in physical sciences in order to maintain continued growth, innovation and manpower to ensure our biotech sector remains world-class.

As we dive full steam ahead in this new year, we can expect to see breakthroughs in drug delivery, as well as greater options through an expanding generics marketplace. But, companies recognize that they can’t do it alone, the FDA needs to remain committed to faster approvals, CDMOs need to continue to work with China and elsewhere on mutually beneficial sourcing partnerships and academia has to work to help us educate the next generation of scientists to fill critical positions. It’s an exciting time to be a part of the industry and working together, we can ensure an industry where everyone profits – patients, government and pharma firms.

Author Biography

Ed Price is President and CEO of Seqens North America CDMO Business Unit (formerly PCI Synthesis), an integrated global provider of pharmaceutical synthesis and specialty ingredients. From the company’s Newburyport, Mass. operations, Seqens NA CDMO provides emerging and mid-sized pharmaceutical companies access to the expertise needed to develop and manufacture complex small molecules.