14
CASE STUDY 1
Risks in Projects in the Pharmaceutical Industry
14.1 INTRODUCTION
Pharmaceutical companies spend billions of US dollars each year in the development of new products. On average, the development of a new drug costs between US$300 and US$800 million and takes between 8 and 12 years from conception of the initial idea for a drug design to production of a final product. The average success rate is about 1 in 12 ranging from 1 in 4 for ‘me too’ to 1 in 25 for ‘blue-sky’ products. Approximately 40% of the ‘starting candidates’ are not sanctioned for further development during the first 12 months of the drug development process (DDP).
Every drug discovered in the laboratory development stage is a potential candidate for further development. The decision to sanction further development is dependent on the results of tests at each stage of the DDP, the costs, time and risks associated with a particular candidate. The development of drugs is dynamic which results in numerous drugs being developed at any one time within the drug development industry. The development of drugs can be considered as a number of discrete phases, each having inherent risks at each stage of the DDP.
(A ‘me too’ drug can be defined as a drug product which may be typified by the commonly used antibiotic type drug following a composition that is already well established and not subject to a patent. An example of a ‘blue-sky’ product would be a drug which would be the first in its class, an example of this may be one which could cure cancer, or a drug such as Viagra which has recently been released to the market.)
Drug development often involves leading edge technology. This usually entails a long development period which is subject to extensive testing and regulation. However, the long-term effects of drugs are not always discovered in the DDP. In the case of Thalidomide, for example, which had a devastating effect on some children, the consequences were not apparent for many years after its production. The devastating effects of Thalidomide led to improved and stricter requirements for clinical testing. It should be noted that Thalidomide is currently being used in the treatment of Acquired Immune Deficiency Syndrome (AIDS) and as a painkiller and is still approved for use in Brazil and Mexico in its original form.
* Reproduced by permission of A. Merna.
The development of Viagra, which began as a cure for angina, was found to have a side effect which reduced sexual dysfunction syndrome (SDS) predominantly in men and has, to date, proved to be a spectacular success. However, no data is yet available about the medium- to long-term effects of this drug.
Similarly the possible medium- to long-term effects from genetically modified crops such as soya, maize or potatoes are uncertain since a great deal of the gene technology is essentially new, and different from old methods of cross-breeding. The imposition of a global ban on available genetically modified crops or drugs, often the result of public outcry reflected in changes to regulatory procedure, could cause devastating commercial losses for the developers and producers. At the time of writing the British Medical Association (BMA) announced they were seeking a total ban on genetically modified crops subject to further monitoring to determine the effects on humans and the environment.
14.2 THE PHARMACEUTICAL INDUSTRY
Over 50% of worldwide pharmaceutical sales are developed by the top 20 international pharmaceutical companies. Most of these companies are based in the United States and Western Europe with bulk manufacturing facilities located in countries offering financial incentives, particularly Ireland, Singapore and Puerto Rico.
The 1990s have brought many changes to the pharmaceutical business, driven by a significant increase in mergers and acquisitions among major pharmaceutical companies. Most companies now focus on their core competencies of developing and marketing new drug products.
For example, a company might use a contract manufacturer to produce a bulk drug which is due to lose its patent, but would typically manufacture a new blockbuster product in house, to ensure total control of that drug over most of its patented life.
Another significant trend is the movement of traditional chemical companies away from commodity products towards high margin speciality products, particularly pharmaceutical and agricultural chemicals. Rhône-Poulenc, Monsanto, Pfizer Lambert, Hoechst and Zeneca are major international companies, which divested their commodity portfolios in order to concentrate on the high value healthcare industry.
The programme of drug design, development, production and finally marketing a drug product that is efficacious in the treatment of a human or animal condition is not highly innovative since the process is well known and understood and is also subject to regulation. However, the approach to the chemistry and the structure of the newly devised molecule may be innovative since the outcome cannot be stated with reasonable certainty at the start of the DDP.
There is generally very little historical data from which a basic starting block for the development of a new drug can be drawn. In the past companies tended to carry out intensive research into the cellular structure, nerve system or locations of the anatomical part of the human or animal. This development programme did not differentiate between beneficial whole body effects and any associated side effects.
In today’s market, the efficacy (i.e. the ability of a drug to produce a desired clinical effect such as protection against infection at a prescribed dose rate) of a drug is more likely to be designed to combat disease and illnesses in a localised manner rather than the whole body. This involves much more in-depth research into the parts of the body requiring treatment and has resulted in improved drug design methods. The refining of the methods in which drugs are designed and developed has also impacted upon the way in which the chemicals are produced for the different stages of the DDP. The refining process has also resulted in an increase in the size of the chemical molecules as drug designs become increasingly complex.
The starting materials can be described as the basic building blocks to which the pharmaceutical company attaches further building blocks. The addition of these building blocks of molecules produces the active and effective drug to be employed in the treatment of specific human or animal conditions. Outsourcing the procurement of starting materials required for use in a candidate DDP is common practice.
During the development process the drug progresses through a number of major stages as shown in Figure 14.1.
Figure 14.1 The major stages of a typical drug development process
During the DDP the following factors have to be taken into consideration and all data and information required by both internal and external authorities made available.
• Quality assurance (QA) – this factor requires that each step of the drug development process is adequately documented, recorded and traceable.
• Quality control (QC) – control methods are required as part of the development process to ensure all necessary tests which control such elements as impurity level tolerances and particle size are carried out.
• Accepted good manufacturing practice – all pharmaceutical facilities must meet current good manufacturing practice (cGMP) guidelines, the interpretation of which can vary from company to company and from supplier to supplier. The pharmaceutical company’s quality control departments are usually looking for more stringent application of cGMP than those found in other manufacturing industries. Prevention of contaminants from operatives and cross-contamination is paramount. Dedicated equipment for testing and production is essential, often resulting in the need for comparmentisation during the DDP and subsequent manufacture. It is common for a candidate drug to be developed at more than one location as part of the DDP.
• Toxicity – this is the most important test carried out in the pre-clinical stage of a DDP. A drug can not proceed along a development path if it is found to be highly toxic.
• Tests in animals – these are important tests in the pre-clinical stage of a DDP; it is during this part of the development stage that carcinogens, mutators and various other undesirable side effects are isolated. Animal testing is carried out prior to first-in-man tests to ensure that no serious harmful side effects are delivered to the subject patients.
• First-in-man tests – these are self-explanatory. It is during Phase 1 of the DDP that any uncertain harmful or unexpected side effects may be discovered. In 2006 the first-in-man tests for a drug, TGN 1412 manufactured by TeGenaro, as an antibody to cancer resulted in life threatening injuries to a number of the paid volunteers. At the time of writing this book the reasons for this have not yet been made public.
• Stability tests – these are performed to ascertain that the drug product will remain stable and efficacious over its stipulated storage shelf life. Testing is carried out throughout the three development phases.
• Scaling up – this is the manufacture of bulk quantities of the drug in the latter part of Phase 2 and all of Phase 3, so that clinical trials required for efficacy tests may proceed. The many factors that affect the scaling-up process include: stability, quality and unexpected reactions between substances not encountered during laboratory development.
• Clinical trials – a new drug is tested first in the test tube, then in animals and finally in humans. A clinical trial involving patients assesses the safety and efficacy of the therapy under highly controlled circumstances. These trials are carried out in three stages and take between two to four years to complete.
A clinical trial is based on a scientifically designed plan to develop new approaches for treating, diagnosing, or preventing specific diseases.
After clinical trials, regulatory authorities such as the Food and Drug Administration (FDA), European Medicines Evaluation Agency (EMEA) or the British Medical Control Agency (MCA) must approve the product for the marketplace. This normally takes two years.
14.3 FILING WITH THE REGULATORY AUTHORITY
Filing a drug is the act of an official request for permission to prescribe a drug. Approval to prescribe is required from regulatory authorities. The main aim of these authorities is the protection of the general public by enforcing public health laws.
Approximately 70% of the expenditure occurs in the last two to three years of the DDP. This is illustrated by the steepness of the curve in Figure 14.2. This is due to the scaling-up process of the drug in order to produce bulk material for clinical trials. The resourcing and allocation of essential personnel and equipment account for a large proportion of this expenditure.
Figure 14.2 Typical cumulative cash flow over the patent life of 20 years. Over the first 6-7 years of the development process approximately 30% of the total development cost is expended
During this period any small changes made to the constituents of the drug can have major time and cost implications and lead to rejection or substantial re-work. Any changes during this period can affect the acceptance of the drug since it is no longer identical to that originally filed.
Pharmaceutical companies work closely with regulatory authorities, especially in the last three months prior to filing approval. This relationship allows pharmaceutical companies to pre-empt the results and plan bulk manufacture. Once filing has been approved for sale of the drug, full scale manufacturing takes place.
Sales of the drug will determine the steepness of the curve and the commercial viability of the investment. Development costs must be recouped as soon as possible over the remaining patent life. During this period the dose form may be changed to suit customer requirements and efficacy. It should also be noted that during the sales phase of the drug long-term effects of the drug on users often become apparent. Vioxx manufactured by Merck as a treatment for osteoarthritis was withdrawn from sale in 2006, in the early sales period of its life. Litigation regarding this drug is now with the US courts. Thalidomide (Celgene) was originally developed to ease the pain of women in the early stages of pregnancy but resulted in the birth of deformed babies. The drug had been on sale for quite along period of time before the link between deformities and the drug were made. The drug is still sold as a treatment for leprosy.
The important factors associated with DDPs are:
• the product for which regulatory approval has been sought must be identical to that developed, tested and filed
• there is an increasing need to shorten development time and
• product capacity can be increased to meet demand in line with country by country regulatory authority approval.
14.4 IDENTIFICATION AND RESPONSE TO RISKS ENCOUNTERED IN DDPs
It is extremely important that the risks associated with each stage of DDPs are identified early in the development process. In this section the authors identify a number of typical risks which may affect the success of a candidate drug and appropriate risk response measures.
Risk – insufficient financial investment at the appropriate times
As the pharmaceutical industry becomes more competitive clinical trials are being expanded. Data required for filing by the regulatory authorities now needs to be achieved in a much shorter time period.
In order that clinical trials may proceed, adequate data are required by the pharmaceutical company to determine the amount of investment required. To provide the necessary materials for clinical trials, investment is required prior to the availability of confirmatory data proving the efficacy properties of the drug. A lack of financial investment may result in:
• increased development time
• the specified drug may not be produced in sufficient quantity for development to proceed and
• the quality of the drug may not meet the required specification should financial resources be relocated to more commercially viable candidates, resulting in unacceptable or varying tolerances. In DDPs candidate drugs are developed in parallel with a nominated drug considered most likely to achieve the desired results on a fast-track basis. In the event of the nominated drug not meeting the required specification the next most likely candidate is promoted to fast-track status.
The impact of these factors could delay the specified filing date and subsequent approval for marketing. This would in turn reduce the patent life of the drug and adversely affect revenue generation. If, however, a drug is found to be unviable in the early stages of the DDP, development can be stopped and no further investment sanctioned.
Response
The risk factors affecting investment may be reduced by carrying out an in-depth study of the technical and commercial factors affecting the project. The production of detailed documentary evidence that will support and endorse the application for adequate investment in technical, financial and resource requirements for each project is paramount. To ensure that the risk of exceeding clinical trial budgets is reduced the authors suggest that an integrated structured decision-making process is utilised concurrently by both scientific and commercial stakeholders. The decision-making process would be based on the data used, the stakeholders involved and the decision logic used and allow traceability of decisions made at each stage of the DDP. The aim of this being to determine which candidates should be fast-tracked on the basis of the actual/planned time and money allocated to each candidate and identify potential areas of risk at each stage of the drug life cycle.
Risk – unreliable test data
The risks in stability testing and data recording are often due to the omission of certain tests, poorly designed tests procedures, unexpected chemical reactions and particle size problems and human error often as a result of overconfidence due to familiarity of earlier tests. In order to understand the impact of stability on a drug, an understanding of a drug’s final dose form is required. In the case of a tablet the size and dose rate are dependent upon the efficacy of the active drug. In a tablet dose form there are also additions of incipient (non-reactive) binding and filler materials required to produce an acceptable product. Stability test data is a mandatory requirement of the authorising bodies for approval and regulatory acceptance. Some of the risks associated with this part of the DDP include:
• a change in dose form which produces a change in the quantity of active drug constituent in the product
• a loss of part of the dose form due to ageing over the product shelf life which also causes loss of active drug constituent
• an unexpected reaction occurring between the active drug element and
• incipient materials during storage and
• Problems arising in the manufacturing process.
The possibilities of loss of an active drug constituent will be detrimental to the product attaining regulatory approval. This can result in delay in filing and affect the remaining patent life in terms of revenue generation and competitive lead. In some cases extra financial expenditure is required to re-engineer stability problems.
Response
Ensure that all testing has been carried out using best practice, and that any anomalous results have been thoroughly examined and recorded and any rectification work necessary carried out before proceeding to the next stage of development. Additional tests which may effect the drug stability at later development stages such as hygroscopy, shape and size should also be performed at this stage. This should reduce the risks associated with particle size, reactions between active drug elements and incipients and loss of dose form material in manufacture.
Risk – lack of quality assurance and quality control
The introduction of new materials and new suppliers of starting materials may result in the loss of QA/QC leading to a loss of time, money and revenue.
Response
Risks associated with QA or QC can be reduced by the introduction of a suitably designed quality management system (QMS) to monitor and record all stages of the development process including quality control techniques, inspections, specified tests and equipment especially for use with materials never manufactured. The QMS should be regularly audited both internally and externally and regularly updated. The QMS procedures must be developed and updated in parallel with the technical and commercial support available at each stage of the DDP. In some cases a new supplier may be required to adopt the pharmaceutical company’s QMS and be supervised by the company’s own quality manager, as described in Chapter 13. Although QMSs are common to most manufacturing industries it is surprising that in the pharmaceutical industry many disciplines prefer to retain information in their heads rather than commit it to paper.
Risk – difficulties arising through the outsourcing of starting materials
It is common practice within the pharmaceutical industry to outsource the starter materials for DDPs. This practice brings with it its own specific risks, those being:
• Employment of a new supplier can often result in delivery, quantity and quality problems which may have a serious impact on the production of the starting material.
• Uncertainties in the origins of the material to be synthesised may require specialist chemistry to be employed, such as explosive or cryogenic methods.
Response
A system of pre-qualification procedures and processes should be introduced to review potential suppliers to determine their technical, financial and managerial expertise, past experience, confidentiality and suitability of their own QMS. It is important to note that one of the main benefits of outsourcing is the risk transfer element. It is extremely important that supplier’s are made aware of the specification required. New materials are based on specifications provided by the pharmaceutical company which must be strictly adhered to. Any changes made by the supplier to the specification can result in the risk of poor quality or low quantity or a complete loss of usable material. To alleviate this situation additional tests should be introduced by the supplier and witnessed by the pharmaceutical company’s technical manager. The supplier should also ensure that his sub-contractors work in accordance with the pharmaceutical company’s QMS requirements. The cost of additional tests will be offset against the occurrence of such risks. At manufacturing stage starting materials are often supplied by more than one supplier. It is essential that all suppliers adopt the same QMS and common lines of communication.
Risk – introduction of previously unseen effects due to the scaling-up process
The scaling-up process brings with it a number of risks, these include:
• Changes in the way the chemical’s react to produce the active drug, resulting in an unsaleable product.
• Changes in the impurity levels in the active drug product which affects the stability test data results.
• Suitability of the quality management system employed
• Changes in the physical properties of the active drug compound that have a direct effect on both the manufacturing process and on the stability data.
Response
Risks in the scaling-up process may be reduced by:
• appointing experienced personnel in key functional roles
• ensuring that precise details of the production processes developed in the laboratory are recorded and incorporated into the scaled-up process
• ensuring that all necessary tests are completed before proceeding to the next stage of development and that any potential risks identified as a result of reducing risk in one area are analysed.
Risk – poor fit of the equipment to the chemical process
Ill-fitting equipment in the chemical process can result in a loss of valuable time, attaining the specified purity of the active drug element and numerous other related problems. Equipment is often dedicated to one candidate drug or one process in a DDP.
Response
Ensure that the equipment to be used fits the chemistry of the process as closely as possible and is regularly calibrated and maintained. Equipment should be clearly labelled to ensure it is used for its dedicated purpose and the dates and types of previous applications identified.
Risk – lack of suitable experience in key personnel at each stage of the DDP
DDP’s typically involve many technical disciplines such as development chemists, biologists, pharmacists, process engineers and laboratory technicians. Commercial and production disciplines are typically drawn from accountants, project managers, IT specialists and technical support staff. The normally long development process often means that many disciplines are only involved with one specific stage of drug development and not the project as a whole. Many disciplines work in isolation, performing tests and recording results which are then passed to the next stage of development without actually being aware of how their results will be interpreted or used. Often the demands of each discipline are not understood throughout the DDP.
The experience of personnel involved in DDPs can be instrumental in causing serious problems on the project with regard to problem solving and critical decision making at each stage of development.
Response
The authors suggest that the project manager should keep all disciplines informed of any problems encountered at each stage of the DDP. The introduction of regular meetings and brainstorming sessions between representatives from each discipline would help bridge cultural and professional boundaries and form the basis for problem solving.
When choosing personnel for a candidate DDP, ensure that key members have adequate experience and are capable of making intuitive decisions when needed as part of a project and not one particular phase. Personnel with the basic skill level but lacking experience should always have a senior or skilled person to advise in situations where important decisions are to be made. Work instructions should form a major part of the QMS and not be seen, as at present, by many scientific disciplines as a barrier to innovation. These instructions should help to identify potential risks within the DDP whilst carrying out the identified processes.
A number of personnel involved in DDPs will have experience of a failed candidate drug who be aware of the reasons for its failure. There will also be personnel with experience of a successful candidate drug who be aware of the reasons for its success. The authors suggest that the choice of personnel for a DDP should include those with experience of success and failure. A combination of the two experiences would provide a more critical review of a DDP as it progresses through development.
Risk – inadequate testing and validation
Omission of certain tests during the processing of intermediate substances and final active drug substance may result in total loss of the product or a serious loss in product quality, quantity and time. This also has an impact on the stability test results.
Response
Ensure that specific intermediate and the final active drug substance tests are carried out and results are recorded prior to validation. This may be achieved by the introduction of a checklist to ensure all necessary tests are carried out and validated in sequential order and have been accepted by all disciplines. This checklist should be incorporated into the QMS. A survey of results found in the application of the drug should be analysed and their findings considered in all future DDPs.
14.5 SUMMARY
The conception, design and development of a drug form is a complex process. Although repetitive, the DDP process, which can involve 1000 activities, is laden with risk and uncertainty at each stage of development.
The drug development industry is in a dynamic environment. Typical risks identified by the authors encountered in DDPs include:
• insufficient financial investment at the appropriate times
• inadequate equipment and lack of suitable key personnel at each stage of the DDP
• the numerous quality functions required in a DDP
• the risk of time overruns at any stage of a DDP
• unreliable test data
• difficulties arising through the outsourcing of starting materials
• changes in regulatory approval.
The pharmaceutical industry has many characteristics of innovative manufacturing industries. The requirement of additional health and safety factors, in some cases longer testing and development times, uncertainty in starting materials and more complex drug designs, however, carry a greater uncertainty than those found in most manufacturing industries. There is also the uncertainty of the product being clinically suitable to all users prescribed the drug which can run into 10 of millions.
The defence and aeronautical industries are also often involved in the manufacture of innovative products. In most cases the funding of such projects is borne by the tax payer. In the pharmaceutical industry DDPs are funded by shareholders and commercial success depends on the volume of sales and selling price over the patent period. Drugs are also market led and do not have the comfort of contract led revenues and are often in competition with other styles of treatment. The funding of DDPs remains a high risk investment with the possibility of high returns or in some cases a total loss of investment.
Although uncertainty will exist over the drug’s patent life the authors suggest that the risks identified in the DDP may be reduced, in most cases, by utilising best practice.
Best practice in this case would involve the development and implementation of a decision-making process and a comprehensive QMS to design out as many risks as possible during the DDP. Adoption of a comprehensive QMS would provide pharmaceutical companies with greater confidence that unexpected risks have been reduced during the DDP and subsequent life of the product. Reducing uncertainty will provide more confidence in the DDP investment.
The adoption of a comprehensive QMS may not be seen as a radical measure for reducing risk in DDPs. However, the authors believe that a QMS would not only help in the management of DDPs but also provide the first step to integrating the processes and disciplines involved. The QMS will provide a suitable risk management tool by ensuring that data feedback is analysed at each stage of the drug’s life cycle and utilised in future decisions-making processes.
The authors wish to thank Dr Anthony Merna and Mr Edward Gould for allowing them to use this amended version of their paper.
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