Challenges and opportunities for pharma industry

The pharmaceutical industry faces some unique challenges and is going through major changes in operating procedures due to increased regulatory scrutiny such as - stringent safety and quality regulations, combined with the effect of innovations in medical science and healthcare, and a complex and costly design-to-market process (from product concept and development to market delivery). Regulations and regulatory compliance is a legal requirement mandated by the regulatory agencies to ensure public health and safety.

With blockbuster drugs representing more than $50 billion in annual revenue coming off patent in the next few years pharma companies are contending with a series of challenges which will affect their revenues.

It takes an average of 15 years and more than $800 million to bring new product from the research stage to market. During this process the agency’s review and approval is highly dependent on the quality of data submitted to the regulatory agencies.

Faced with the continuing financial and competitive pressure, many companies are moving beyond the traditional narrowly focused relationships and exploring new types of strategic partnerships designed to deliver project oversight cost reductions and time savings without affecting the core business processes.

Pragmatic shift in regulatory environment
The demand for globally acceptable products heightens the imperative for harmonization of regulatory requirements to lend efficiency and cost effectiveness to the process of product development, manufacturing and expediency to global access.

Harmonization of regulatory requirements is also enabling the globalization of regulatory affairs activities. Many of the global pharma companies are publicly pursuing aggressive growth strategies in commercially important emerging markets including the BRIC (Brazil, Russia, India and China) countries as well as others such as Mexico, South Korea and the Middle East region. In this respect, a truly “global” regulatory affairs organization needs to foster local knowledge, cultural understanding and personal contacts in these markets to support ambitious commercial strategies through achieving timely and full approvals, and ultimately market access.

Equally, as electronic submissions continue to replace paper, companies can now be more flexible about where they locate the resources delivering business processes. Moreover, with eCTD, E2B and other forms of electronic submission becoming commonplace in the core ICH countries and beyond, leading global regulatory affairs groups can take advantage of these trends to diversify and reduce their cost base through offshoring strategies.

Challenges for pharma industry
However, the regulatory agencies are working towards the harmonization of regulations and regulatory guidelines at global level pharma industry is facing tough time meeting these goals as the individual requirements of member states still remains independent of harmonized concepts.

As we see the world moving from paper submission to e-submission still regulatory agencies of some member states such as Poland, Greece demands paper submissions along with e-submissions. The major challenges faced by industry are:

Changing regulations
As the developing country’s economy is growing they are emphasizing more on the public health and their well-being. The regulated countries like Europe, US is emphasizing on more stringent guidelines and regulation concerning the development and manufacturing of the drugs for human use. Gone are the days when the emphasis was given only on quality, now the regulators have become more demanding and expecting the industry to match the standards which comply with the concepts such as quality by space, quality by design, quality risk management. The expected changes and challenges in the regulatory guidelines are:

• Quality by design which will be mandated by regulatory agencies and will become mandatory by January 2013.

• FDA expects generic drugs manufacturer to implement quality by design (QBD) into their ANDA Module 3 section 3.2 P.2 Pharmaceutical Product Development by 2013.

• ICH Q11 - Development and manufacture of drug substances which is reached step 4 of finalization and will be implemented by 2013.

• European authorities (EMA) as such have mandated the risk management plan as a mandatory requirement to be submitted while submitting the application for marketing authorization since January 2011

• To encourage the compliance post authorization the EU parliament have already made it mandatory to submit all the data related to safety for authorized products should be submitted electronically as per the EVMPD technical specification at latest by July 2, 2012 and for all the new submissions from that date onwards.

Further addition to e-reporting becoming mandatory ICH expert working group (EWG) is already drafting the ISO-IDMP (Identification of Medicinal Products) standards and is likely to be finalized by end of 2015. EMA has already announced that from January 2015 onwards ISO-IDMP will be adopted and current standards would not be valid. US FDA is also working to implement the ISO-IDMP standards for e-reporting by 2015 and EU/EMA will be the first authority to implement these standards.

Strict timeline for implementing new changes

• By 2 July 2012 at the latest, marketing authorisation holders shall electronically submit to the Agency info on all medicinal products for human use authorised or registered in the Union

• Medicinal product info for new or varied, suspended or revoked marketing authorizations in the Union after July 2, 2012 shall be submitted by marketing authorisation holders electronically to the Agency immediately and no later than 15 calendar days from the date of authorisation, variation, suspension or revocation.

• Medicinal product info for new or varied, suspended or revoked marketing authorizations in the Union after January 1, 2015 shall be submitted electronically by marketing authorisation holders to the Agency using ISO-IDMP standards by  Dec 31, 2015 at the latest. This shall also include information where the medicinal product has been withdrawn from the market by marketing authorisation holder after January 1, 2015.

Product life cycle management
While companies are busy in keeping in maintaining their new submissions up-to-date at the same time assuring the compliance to the existing and new standards enforced by the regulatory agencies, maintaining the product life cycle is another challenge, as the regulators want the same standards to be implemented for the already registered products latest by July 2, 2012. All the data for new and existing authorizations may it be renewal application, variation application; change in SmPC content and/or safety information all should be submitted electronically complying with the EVMPD standards.

Barriers to implement electronic reporting industry wise
Industry is reluctant but has option other than complying with the regulatory requirements enforced by EMA/US FDA/PMDA. Few barriers that industry is facing to adopt or implement the electronic data interchange (EDI) are accompanying business process change. The existing process built around slow paper handling may not be suited for EDI and would require changes to accommodate the new processes.

Another yet main crucial factor is cost in time and money required in the initial set up. The preliminary expenses and time that arise from the implementation, customization and training can be costly and therefore may discourage some businesses. The adoption of the new technologies threatens the records and information in older systems. Companies are afraid to make the dive into digital transformation.

How outsourcing can help?
Many MNCs are outsourcing their regulatory work to lessen the pressure on their in house team or to support the same. Electronic submissions have encouraged SMEs to turn to outsourcing partners more frequently to manage their product submissions.

Under the umbrella of ever changing regulations and requirements at very fast pace, Trends are shifting from managing everything to outsourcing the services to the regulatory partners. Business insight has reported that regulatory outsourcing is growing at 31% in 2011 when compared with the 18% in 2008.

Companies are adapting to outsourcing model of regulatory product submissions (14%) as reported in 2011 as compared to 7% reported in 2008.

Conclusion
In view of the regulatory harmonization globally and its ever increasing complexities, proactively managing regulatory complexities worldwide becomes the prime concern for any organization. The pharma sector is growing at 40-41% per annum when compared to the other sectors. The US market for outsourced pharma services which includes regulatory, R&D, manufacturing - is growing at the rate of 10-12% annually. Pharma companies will continue to fuel much of this growth as they outsource an increasing number of products and services. Biotechnology companies, which have almost doubled in number during the past five years, also contribute to this trend as they seek ways of bringing their products to market without making capital investments in their own facilities.

Pharma alliance or partnership holds cost benefit advantage by reducing huge amounts of capital outlay for producing latest technology in-house. Outsourcing reduce the overall costs by 30-35%. Outsourcing can allow pharma companies to establish consistency and efficiency across sprawling international networks. Outsourcing if managed and executed strategically has every potential to add value to the existing business.