Pharmaceutical Starting Materials/Essential Drugs

BULLETIN

MNS October 2009

PHARMACEUTICAL STARTING MATERIALS

MARKET NEWS SERVICE (MNS)

BI-MONTHLY EDITION

Market News Service

Pharmaceutical Starting Materials/Essential Drugs

October 2009, Issue 5
The Market News Service (MNS) is made available free of charge to all Trade Support Institutions and enterprises in Sub-Saharan African countries under a joint programme of the International Trade Centre and CBI, the Dutch Centre for the Promotion of Imports from Developing Countries (www.cbi.nl).

Should you be interested in becoming an information provider and contributing to MNS' efforts to improve market transparency and facilitate trade, please contact us at [email protected].

This issue continues the series, started at the beginning of the year, focusing on the leading markets in various world regions. This issue covers the trends and recent developments in eastern European pharmaceutical markets.

To subscribe to the report or to access MNS reports directly online, please contact [email protected] or visit our website at: http://www.intracen.org/mns.

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Market News Service

Pharmaceutical Starting Materials

Introduction

WHAT IS THE MNS FOR PHARMACEUTICAL STARTING MATERIALS/ESSENTIAL DRUGS?

In 1986, the World Health Assembly laid before the Organization the responsibility to provide

price information on pharmaceutical starting materials. WHA 39.27 endorsed WHO‟s revised drug strategy, which states “... strengthen market intelligence; support drug procurement by developing countries...” The responsibility was reaffirmed at the 49th WHA in 1996. Resolution WHA 49.14 requests the Director General, under paragraph 2(6) “to strengthen

market intelligence, review in collaboration with interested parties‟ information on prices and sources of information on prices of essential drugs and starting material of good quality, which meet requirements of internationally recognized pharmacopoeias or equivalent regulatory standards, and provide this information to member states”.

MNS FOR PHARMACEUTICAL STARTING MATERIALS IS AIMED AT YOU:

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If you need to purchase pharmaceutical active ingredients to produce essential drugs at reasonable cost.

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If you wish to stay informed about worldwide prices; If you need a guide to compare market prices and for your negotiations; If you seek market information, industry and regulatory news with respect to APIs, generic drugs;

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If you wish to remain informed about overall pharmaceutical industry developments relevant to developing countries.

ASSURING QUALITY

In this publication, quality is expressed in terms of pharmacopoeial standards, when available¹. When the pharmacopoeial standard is indicated as quality standard, the latest edition of the pharmacopoeia would apply. In accordance with the principles of good manufacturing practices (GMP), it is the dosage form manufacturer who must assume responsibility for the quality of the final pharmaceutical products. The acceptability of each starting material has to be established by developmental (pre-formulation, development of pharmaceutics) studies and confirmed through validation programmes for manufacturing processes. The Information Providers screened by MNS, are those that exhibit their dedication to quality assurance by maintaining up to date ISO 9000 certification, conform to WHO GMP requirements and fulfil minimum batch certification and labelling requirements. MNS collects data from Information Providers on the following:

(a) Batch certificate that meets the following minimum requirements including:
Name and batch number of the Pharmaceutical Starting Material Name and address of the manufacturer Manufacture and expiry date/retest date Type of container Net weight of the content per container and the number of the containers Date of latest analysis Quality specifications

(b) Minimum labeling requirements for Pharmaceutical Starting Materials including:
Name of Pharmaceutical Starting Materials Batch number Name and address of manufacturer Specification of active materials Expiry or retest date Storage indication Name of supplier if applicable

¹The list of covered products includes additives and fillers for which no pharmacopoeial standards are available.

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The MNS does not guarantee the quality of the substances listed in this report. Licensing authorities in the respective countries of manufacture are expected to be responsible for the review and approval of the detailed composition and formulation when authorizing a pharmaceutical product to be marketed, including the specifications of its ingredients, as submitted by the manufacturer of the dosage form and oversee compliance with GMP requirements as recommended by WHO.

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INDEX

INTRODUCTION...................................................................................................................2 INDUSTRY TRENDS ............................................................................................................5 REGIONAL FOCUS ..............................................................................................................6

North America....................................................................................................................6

4

Industry Trends

At the end of the third quarter of 2009, the outlook on future growth for brand drugs has improved compared to what was originally anticipated but will remain low, according to analyses by pharmaceutical consulting firm, IMS Health. Global pharmaceutical sales for 2009 were set to grow by 2.5-3.5% in April. Revised figures place growth rates at 5.5-6.5%.¹Based on drug sales information in 220 countries, this trend is attributed to healthy growth in generic drug sales, supported by an upcoming patent expiry, dry drug pipelines and a tough global economic climate. being adopted is to intensify the marketing of drugs which have gone off-patent while expanding into only selected segments of the generic industry.²

Major pharmaceutical companies are also venturing into the vaccine business, a field which is becoming increasingly attractive in light of recent high demand for vaccines. US-based Abbott Laboratories concluded a USD 6.6 billion deal with Belgian biotechnology company, Solvay, to acquire vaccines. Johnson & Johnson is also set to acquire an 18% stake in Dutch biotechnology firm in order to maximise its vaccine technology. Merck has also entered into partnership with Australiabased CSL for gain marketing rights for its flu vaccine.
Expansion of pharmaceutical companies into emerging markets, a move already evident at the beginning of the year is

confirming

itself as

pharmaceutical

companies, generic and brand alike establish themselves in these markets. The countries concerned, referred to as EM-7 or “pharmerging” markets, include China, India, Russia, Brazil, South Korea, Mexico and Turkey. The strategy adopted by brand pharmaceutical companies is to link up with generic manufacturers who are already quite established in these markets.
Favourable developments are boosting the

recent

growth

and

developments

observed. Vaccines against papilloma virus and pneumococcal disease are being marketed for higher values than was previously the case: around USD 100 rather than a few dollars. The sector is also benefiting from increased investment thus increasing access to the latest

technologies.

In

fact,

emerging

technologies

promise

to

make

Earlier in May, Pfizer concluded a deal with Aurobindo aimed at seven emerging markets; a month later, GSK entered into

partnership with India‟s Dr. Reddy‟s

Laboratories. Companies are also building up local presence through the construction of low-cost manufacturing sites and R&D linkages with local companies and academic institutions. A common strategy biopharmaceutical development quicker and more efficient. While the potential for expansion is there, several possible

challenges

remain.

Namely,

the

development of such biotechnology products is a long and costly process. Also, because vaccines are manufactured and not reusable, an overproduction of vaccines can often symbolize wastage.

5

Regional Focus

North America

United States of America

General Market Trends

The US pharmaceutical market is the largest in the world, ahead of the other importing FDA-approved drugs of foreign origin, a measure which would save an estimated USD 50 billion. Another factor which will also slow growth in drug sales is the economic slowdown which has resulted in higher unemployment, stripping many of their employer-provided health insurance.

major

markets:

western

European

countries and Japan. In September 2009, the US pharmaceutical market was valued at USD 229.7 billion, whereas the top 5 European markets valued at USD 105.5 and Japan at USD 77.4 billion. The demand for pharmaceuticals is also high

within

the

US

especially

where

The US pharmaceutical companies are

key players on the global pharmaceutical markets as well as domestically. The top four domestic suppliers consist of the following companies—in decreasing order of dominance in the domestic market: consumption per person is the third largest in the world after France and Spain.

The continued research and development of drugs and the ageing population are projected to drive the growth of the local pharmaceutical market. Adults aged 65 and over are major consumers of drugs and are living longer as a result of access to medicines. However, elevated drug prices and consumer cost-consciousness are likely to slow the future growth in demand. Unlike in other developed countries, the government is legally not allowed to negotiate better prices with drug suppliers. Hence, drug prices in the US are 30% above the average of other countries within the OECD. In fact, this has led to greater demand for Canadian drugs which are considerably cheaper. In addition, President Obama is in support of

Pfizer, Johnson

&

Johnson, Abbott

Laboratories and Merck & Co. These companies are also ranked among the top ten global pharmaceutical companies.

Leading

pharmaceutical,

Pfizer,

is

benefiting from the success of its cholesterol-lowering drug, Lipitor. This is indicative of the therapeutic areas in which pharmaceutical companies are venturing in, namely chronic illnesses for which medicines are especially profitable. Increasingly, the industry is also shifting towards the R&D of more specialised treatments rather than relying on creating a highly profitable drug for a larger audience.

Generic drugs

Generic drugs are occupying an increasingly greater share of the US pharmaceutical market. According to industry research firm, RNCOS, the share of generic prescriptions from the total measure, this will likely boost the demand and sales of biosimilars in the future.

As with their brand counterparts, the major generic manufacturers which dominate the US pharmaceutical market are also key global players. These include Mylan, Alpharma and Watson. However, Israelbased Teva Pharmaceuticals remains the top generic manufacturer and a leader in the US pharmaceutical market. Hence, there is intense generic competition which is placing a dent in brand pharmaceutical revenue and likely to be a downward force on prices overall.

pharmaceutical

prescriptions

rose

dramatically from 19% in 1984 to 70% in 2008. Growth in sales is set to be boosted by the expiry of patents on highly profitable brand drugs as well as the promotion of generic drug use by the administration as a cost-saving initiative. US president Obama is highly supportive of the legislation to facilitate the development and marketing of biosimilars. Also seen as a healthcare cost-cutting

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Regulation

The US pharmaceutical industry is also attempting to rebuild its credibility following a series of events which has decreased
The US FDA has taken measures to tighten regulatory approval and has also established offices in key producing countries, such as India and China. This initiative was taken to further safeguard consumers given the increasingly large share of pharmaceuticals and products

consumer

confidence.

Some

antidepressants have been said to increase to incidence of suicide among

teenagers. Vioxx, Merck‟s highly profitable

pain relief drug was withdrawn from the market in 2004 after allegations that it increased the risk of heart attacks and strokes. In 2008, adverse reactions observed to the anticoagulant, heparin, imported from China raised safety concerns and further damaged the credibility of the industry and the US

FDA‟s.

imported

from

foreign

sources.

Additionally,

the

government

administration has increased the FDA‟s

budget for the next fiscal year, a move which should allow the regulatory body to carry out its operations more effectively.

Canada

General Market Trends

In 2008, the domestic pharmaceutical market was valued at USD 30.3 billion, based on prescription and OTC drug sales, making Canada the seventh-largest pharmaceutical market in the world. In
73% was exported to the United States alone. There is a high demand for cheaper drugs on behalf of US citizens seeking alternatives to relatively highly priced medicines available on the US market. The largest suppliers on the local market are Pfizer, with 13.4% of the market share, followed by AstraZeneca and then Johnson and Johnson. The domestic Canadian pharmaceutical industry is relatively small but Biovail is a major player on the local market. The biotechnology industry, on the other hand,

September

2009,

the

Canadian

pharmaceutical market was valued at USD 15.79 billion, a 6% increase from figures

available

a

year ago. Demand for

pharmaceuticals remains high as drug expenditure is the second largest category in total healthcare expenditure. However, in light of the fact that the healthcare system is largely publicly funded, the government bears the majority of the costs, followed by private insurance companies thus dampening the effect of the global economic downturn on drug consumption. Only 15% of the drug expenditure is covered by out-of-pocket payments. is growing and benefiting from

government push towards “high

technology, innovative, R&D-based a

aindustry”. However, the industry is in need

of greater investment and funds as many biotech companies are unable to carry out their drug development all the way through clinical trials.

Canadian drug exports totalled a value of USD 6.5 billion in 2008 of which about

Generic industry

Generic drugs constitute a major part of the local pharmaceutical market. One half of the prescriptions are filled by generic drugs. Hence, demand for generics is currently high and showing more growth potential in light of the upcoming patent expiry for several highly profitable drugs.
In 2008, the generic market was valued at USD 4.7 billion, already demonstrating a 20% increase on the previous year.

The prices of Canadian generic drugs are beginning to come under attack by government and the Competition Bureau.

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Generic drug prices are still relatively high and a reduction in prices estimated to result in major savings.
Fifteen suppliers constitute the domestic generic drug sector, of which the largest is Apotex. Leading manufacturer, Mylan Pharmaceuticals has also entered the Canadian market through its acquisition of leading domestic manufacturer and Merck KGaA subsidiary, Genpharm.³Apotex has

also entered into a partnership with India‟s

Like the United States, Canada has ventured into biosimilars; it has created legislation to monitor the research, development and marketing of these drugs, seen as a potential cost-saving

initiative

in

the

future

of

the

Biopharmaceuticals

Limited

to

pharmaceutical industry.

manufacture biosimilars.

Table 1. Total annual pharmaceutical sales (2006-2009)

Country

United States (USD trillion) Canada (USD trillion)

2006

320 25.3

2007

349 27.2

2008

379 30.3

2009

351 34.1

Source: Economist Intelligence Unit

8

Selected Industry News

AIDS vaccine: are we there yet?

On September 24^th2009, the Thai Minister of Health announced positive but preliminary results of an anti-HIV vaccine trial (known as RV 144) carried out in Thailand. The vaccine, he stated, reduced the rate of HIV infection by 31% percent, compared to a placebo. Although offering modest protection, the news was received with much optimism and enthusiasm. founded particularly in light of recent news: additional analyses carried out on RV 144 data and published in the New England Journal of Medicine revealed that the

protection

observed

may not

be

statistically significant. Hence, the vaccine cannot yet be fully relied upon to curb HIV infection rates.

Yet, regardless of the current stumbling blocks, researchers and public health agencies see in RV 144 the confirmation that an effective HIV vaccine could, eventually, become a reality. It opens up a variety of avenues which can be investigated based upon the results of the study, such as different vaccines and different immune responses. In the words of Alan Bernstein, executive director of the Global HIV Vaccine Enterprise, an alliance of governments, AIDS scientists, the World Health Organization and funders such as the Bill and Melinda Gates

Foundation: “The bottom line is that those results are real…We for the first time,

have evidence of protection, and the nitty

gritty (arguments) to me don‟t matter…”

He is not alone, many more agree that while we may not have an effective vaccine yet, we have definitely taken a major step towards that goal.
The results were obtained from a US Army-sponsored Phase III trial of a large HIV/AIDS vaccine carried out in Thailand by the Ministry of Public Health, with just over 16,000 HIV-negative volunteers. The volunteers came from the general population and not from particularly highrisk populations. The trial began in 2006 with a vaccine and participants received an HIV-test every six months for the next