Introduction – High Potency Drugs
The high potency drug market is one of the key revenue-generating segments in the pharmaceutical industry and the market holds enormous potential. There is high demand for oncology and other high potency drugs such as ADCs and IV fluids. On the demand side, buyers are looking for high capacity suppliers who can meet their API OEL limits, have lyophilization capability in injectable dosage forms and ample experience in handling high potency drugs. However, on the supply side, there are a limited number of CMOs who meet the exact needs of buyers as provided above.
Manufacturing high potent drugs requires technical expertise, contemporary technology, and an appropriate containment facility. This necessitates costly capital and results in high operating costs, making the production process an expensive one. Hence, fewer CMOs are available to meet the necessary pharma KPIs. Currently, most of the big pharma companies are developing high potency drugs in-house, but consequently there are strong incentives to outsource the same. Nearly 40% of the new chemical entity manufacturing is outsourced to big CMOs based in North America and Europe.
This article focuses on challenges that the market is facing in terms of supply, regional distribution of suppliers, and how the growing demand for HPAPI drugs is impacting the CMO market in terms of capacity expansion, new facilities, upgrading/investing in new capital, mergers and acquisitions, etc.
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Nearly 50% of high potency drugs are in injectable form followed by semi-solids. The global market of high potency drugs is $15 - 17B, growing at CAGR of 15-18% until 2022 as more and more innovative companies are looking to outsource this segment to avoid the high cost of maintenance. Also, due to high and increasing regulatory compliance, companies that have a few drugs in their developmental pipeline, are looking for capable CMOs to address these challenges.
Strong Growth Potential in CMO of High Potency Drugs
Innovator companies are focusing more on the use of HPAPIs to deliver new patient therapies by providing effective, low dose and well tolerated medicine. Several oncology molecules in the pipeline of big pharma companies are highly potent, the main driver for HPAPI drugs CMO market. Manufacturing high potency drugs needs proper containment technology, dedicated facilities, and sophisticated equipment, which are expensive to maintain and operate. Hence, big pharma prefers to outsource generic high potency drugs.
Despite the stringent regulatory requirements and high cost of production, CMOs are focusing on the production of HP drugs to fill this market gap. As the demand for HP lyophilized formulation (injectables, powders) increases, there is a need for more capable CMOs to meet the increasing demand.
The global oncology market is expected to reach $200B by 2022 with CAGR of 10-13%. Oncology, a major driver in the growth of HPAPI, is the major therapeutic area with a 20-25% market share in the total demand of HP drugs. It is estimated that 60% of oncology drugs in development are high potency. The percentage of HPAPIs used for oncology has increased from 50% in 2015 to 60% in 2018.
Which Market is Dominated in Supply?
- In terms of supply, Europe is the dominant market with many CMO facilities, followed by the US. Asia (India and China) is still at the nascent stage for CMO service providers in high potency drugs.
- Out of 50 CMOs considered for analysis, and capable of handling HP drugs, 70% of the facilities are European based, mostly in Germany and the UK, 25% in US, and only 5% in Asia.
- In terms of revenue, North America and Europe are the predominant regions for CMOs with high potency drugs’ manufacturing capabilities.
- Among these CMOs, 45% of CMOs are full-service providers of HP drugs (backward integration with HPAPI) and can be considered as one-stop shop companies.
- Suppliers have the ability to process HPAPI with OELs <10μg, but there are a handful of suppliers with the ability to process OELs of 0.10-0.01 μg.
- Suppliers who off er commercial scale production of HP drugs have expanded their capacity to meet the increasing demand.
- Some high potency compounds (such as peptides, MAb, oligo-nucleotides, etc.) require a highly sophisticated knowhow, implying a very high cost.
Does the Market Have Enough Supply?
The high potency market is growing at a fast rate. Today, the demand for injectable high potent drugs is higher than the capacity of the CMOs. This demand is mainly for lyophilized products. One of the constraints of the market is the need for specialized containment facilities to handle HP drugs.
Nevertheless, identifying an increase in demand for anti-cancer drugs, several companies are investing in new capital to improve their capacity. By 2021, many new facilities will operate with a huge capacity, which will equalize the demand. It is important to introduce the product inside the facilities during the next three to fi ve years because once that the product is within the CDMO it is difficult to transfer to another CDMO. Hence, suppliers having both development and manufacturing at the same location provides a competitive advantage
Additionally, pharma companies prefer to engage with a fully integrated CDMO service provider capable of high potent API development from formulation through manufacturing. Currently, there are a limited number of CDMOs who offer both HPAPI (DS) and DP.
Critical KPIs identified by Pharmaceutical Buyers
- CMO handling capabilities for different OEL limits (=<10 μg/m3) of high potency API
- Dedicated facilities for clinical and commercial production
- CMO backward integration with HPAPI
- Experience in handling HP drugs and existing client experience
- Successful regulatory record
- Lyophilized HP drug formulations and handling experience
- Available commercial production capacity
Trends
As the market for contract manufacturing of highly potent drugs continues to grow, suppliers are finding the market attractive to invest in the new containment facilities. Suppliers who offer commercial scale HP drug manufacturing have expanded their capacity to meet the demand.
In the last few years, CMOs of high potency drugs have invested in high potency drug manufacturing capabilities. Likewise, high potent API producers have increased capacity to meet the rising demand.
Currently there is no overcapacity in the market and still, investment is needed from suppliers to meet the anticipated growing demand of big pharma companies.
The generic HPAPI drugs market is expected to see strong growth due to patent expirations. Also, there is an increasing trend of pharma companies to engage with a single partner who can provide HPAPI development and manufacturing services. This will help reduce the overall time and drug development cost.
Conclusion
Big pharma companies are shifting towards outsourcing strategies as the most cost-effective approach in the management of high potency drugs. CMOs have expanded capacity and capabilities in HPAPI and HP drugs formulations; however, the big pharma companies have increasing needs for CMOs with specialized capabilities such as integrated services and customizable approaches. North America and Europe are still dominant regions for outsourcing high potency drugs, especially cytotoxic drugs. Outsourcing to emerging markets might have cost advantage but regions such as India and China are hindered due to very fewer suppliers with required capabilities.
Keywords Used
CMOs, high potency drugs, HPAPI, capacity, demand, cytotoxics, oncology
References
https://www.dcatvci.org/5658-cdmos-cmos-expand-high-potencymanufacturing
https://www.contractpharma.com/issues/2018-09-01/view_features/hpapi-technology-evolution/11669
http://www.jefferies.com/CMSFiles/Jefferies.com/files/NextPharma20Technologies%20Holding%20Limited.pdf
https://www.contractpharma.com/issues/2018-09-01/view_features/hpapi-market-trends/11669
https://www.epmmagazine.com/opinion/highly-potent-discussingthe-growing-need-for-high-potency-h/
http://www.pharmtech.com/building-capacity-potent-apiproduction?pageID=3
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