Building on Strength: Excipient Supply Chain Prepares to Meet Global Demand

Friday, December 22, 2017

That's Nice

The excipient market is enjoying a growth period. According to market and trend analysis firm Grand View Research, demand for stabilizers anti-adherents, bulk fillers/diluents, lubricants, disintegrants, binders, coatings, polymers and other performance-enhancing ingredients is projected at 744,621 tons by 2020.¹ Every category of excipients is predicted to rise steadily over the foreseeable future, and at a healthy, sustained, compound annual growth rate (CAGR). The ongoing rise in the demand for safe, affordable, and effective medications is affecting all sectors of the industry. This is not limited to excipient suppliers, who are refining their strategies to retain and grow market share. ¹

Research & Markets projects the overall market for excipients will reach $7.7 billion by 2022, with a CAGR of 7.3%.² On the low end of recent estimates is reports firm IndustryARC’s projected $5.4 billion total market value, stemming from a 6.2% CAGR. Even more optimistic, research firm Mordor Intelligence, anticipates the global pharmaceutical excipients market will reach $9.9 billion by the end of 2021, sustained by a 7.2% CAGR that began in 2016.^3,4 Regardless of how large the market eventually turns out to be, it will likely be substantial and capable of sustaining this growth, indicative of the industry overall.

Data from the Nice Insight Pharmaceutical Excipients Survey supports the expectation of excipient market growth. Based on responses from 541 respondents spread fairly evenly by geography (33% in North America, 29% Europe, 38% Asia) and company size (35% large, 39% midsized, 19% small, 6% emerging and 1% contract development and manufacturing organizations) higher spending is expected throughout. Of excipient-purchasing pharma companies, 64% expect spending to increase in the next year. This trend is particularly marked in Asia, where 82% expect an increase. Although the companies covered by the study vary in regards to the size of their purchasing budgets, nearly half spend between $10 million and $100 million/year on excipients. Respondents expects to see higher spending over the next three years in every product category, including three categories currently consumed least: more than 50% responded they expect the use of combinations, glidants and humectants to increase in the next three years. ⁵

The 2017 Nice Insight Pharmaceutical Excipients Survey found that across most pharmaceutical and biotechnology sectors, global companies are using a wide variety of excipients in their formulations, with no single category either dominant or insignificant in consumption terms. Most excipient users expect their consumption of most every category of excipient to increase in the next three years.⁵

How Excipient Suppliers are Keeping - and Winning - Customers

2017 Nice Insight Excipient Survey data shows that when ranking suppliers, customers’ key criteria include quality assurance, reliability, minimized risk, regulatory track record and affordability. With no single primary selection criterion at play in the selection process, 80% rank regulatory compliance ahead of product specifications (79%) and inventory availability (76%).⁵ Global presence, while still important at 61%, ranks last of 14 specified attributes covered in the study. Although being a big player may get a company on the list, it may not swing the final decision.⁶

Once involved with a supplier, companies said they valued on-time delivery (82%), quality compliance (80%) and communication and transparency (78%) as driving satisfaction. The most common sources of dissatisfaction when working with a supplier, on the other hand, include putting a product or service quality ahead of delivery.⁵ A number of trends have been identified as driving excipient demand in the closing months of 2017; solubility and bioavailability challenges are high on the list, as well increasing the life cycle potential of drugs in their portfolio and improving manufacturing quality and efficiency.

The solubility and permeability of many NCEs, which are often highly potent, is a key new drug formulation development issue; the industry is in the process of exploring new approaches to drug development and ways to tailor drug delivery. The 2017 Nice Insight Pharmaceutical Excipients Survey revealed solubilizers (generally used to improve the solubilization of hydrophobic substances and to increase bioavailability) experienced a 49% increase in consumption year-over-year.⁵

As demand for more difficult-to-develop compounds and formulations rises, the industry is becoming more aggressive in evaluating nonconventional technologies for effective delivery - in an effort to mitigate risks while enhancing the efficacy of drugs and bringing these compounds to the market faster. Multi-functional excipients for example, play an important role in innovating delivery technologies and helping in-line extensions of marketed drugs.⁷ These excipients can also help enhance compressibility, improve bioavailability and particle size distribution while reducing dust generation and other effects. Aware of the benefits, the use of excipient combinations has grown 56% among 2017 Nice Insight Excipients Survey respondents.

With the number of biological actives expected to come off patent, biosimilars will likely drive an increased need for biological and biopharmaceutical excipients to support a number of processing steps and cell platforms. Nice Insight’s Excipients Survey data indicates that large-molecule manufacturers represent a growing group of excipient purchasers across the industry.⁵

Quality, Compliance and Innovation

Regulator’s focus on manufacturing excellence to deliver a secure and safe drug supply also extends to ingredient suppliers. Excipient manufacturers, the FDA and drug manufacturers are currently working out better pathways to demonstrate GMP compliance. In May, the International Pharmaceutical Excipients Council (IPEC) responded to increased regulatory emphasis on risk assessment and announced it had updated the IPEC-PQG GMP Guide, The IPEC – PQG Good Manufacturing Practices (GMP) for Pharmaceutical Excipients 2017 bringing the document in line with the latest thinking, said the industry group, on GMP requirements for pharmaceutical excipients.⁸ According to IPEC, much of the guidance involves better documentation, emphasizing electronic record keeping measures and ways to manage corrective actions.

Judging by these recent trends, excipient suppliers must focus on engaging buyers and be on the forefront of innovation, accelerating ingredients into the drug development stream. Given the concurrent analysis of the excipient market, there is tremendous energy in this category, with few signs to indicate a slowing down of momentum.