business environment for who prequalified medicines arab union of the manufacturers of...

Business environment for WHO prequalified medicines

Arab Union of the Manufacturers of Pharmaceuticals and Medical Appliances

Amman, Jordan, 13 June 2013

Jacqueline Sawyer

Outline

• General medicines environment• Medicines markets (medicines procured through

international donor funds via e.g. Global Fund to Fight HIV/AIDS, TB and Malaria, UNITAID, UK Department for International Development, USAID)

• Indirect benefits of prequalification• Investment needed for prequalification• Investment needed for prequalification, depending on type

of manufacture• Business decision process

page n °2

Business environment for WHO-PQed medicines | Amman | June 2013

The general medicines business environment

• In treatment/health needs in PQP's current areas of therapeutic interest constant evolution due to:

development of new medicines/dosages/ strengths, e.g. to respond too simplify treatment, improve adherence (e.g. fixed-

dose, paediatric)o drug resistance o public-private partnerships (e.g. antimalarials)

• In regulation: harmonized medicines regulation: international

regulations becoming the norm (no escape!) sharing of regulatory information sharing of regulatory tasks

page n °3


What does market looks like for HIV/AIDS?

page n °4


Millions of patients on ARV treatment

20012002

20032004

20052006

20072008

20092010

20112012

20132014

20150

2

4

6

8

10

12

14

Mill

ions

of P

atien

ts

2012: 8 million patients (low-/middle-income countries) treated with quality-assured ARVs

Market expansion: new WHO guidelines recommend earlier initiation of therapy generic accessible (GA) ARV market: today's 8 million would be 15 million tomorrow

New guidelines recommend single, preferred, 1st-line regimen of TDF + 3TC (or FTC) + EFV for adults, adolescents and older children

Will put pressure on FPP and API manufacturers

HIV/AIDS: the opportunity

• ARV market is large and growing• Newer ARVs (tenofovir-based combinations) still have

reasonable price levels (from manufacturers' point of view)

• Also: many opportunities in new formulations of leading medicines and several niche market opportunities, both for HIV treatment and treatment of related diseases and conditions

page n °5


page n °6


Global Fund to Fight AIDS, TB and Malaria leading products in 2010:• Market is dominated by four

(prequalified) products (67% market share), two 1st-line and two 2nd-line products

• Prequalified products share of Global Fund anti TB market: 80%

Global Fund leading products in 2012???:• Large number of products prequalified in

2012; analysis expected to show some shifts

• Interest of TB manufacturers in seeking prequalification reflected market value?

PAS sodium (2nd-line)21%

Cycloserine (2nd-line)19%

Ethambutol + Isoniazid + pyrazinamide + rifampicin

(RHZE) FDC (1st line)17%

Isoniazid + Ri-fampicin - FDC

(1st-line)10%

All other TB medicines

33%

TB market leading products (Global Fund 2010)

What does the market look like for TB?

Anti-TB medicines: the opportunity

• Currently, 1st-line TB market is a stable market with stable prices

• 2nd-line TB market is a growing with stable prices for leading 2nd-line products

• Few companies supplying the leading 2nd-line products

page n °7


What does the market look like for malaria?Leading antimalarial artemether + lumefantrine fixed-dose combination (A+L FDC), Global Fund & UNICEF

Number tablets & patient share A+L FDC

MMean price A+L FDC tablet

page n °8


Artemisin-based combinations: sales of WHO-prequalified artemisinin-based combination (ACT) medicines nearly 300 million individual treatment courses procured in 2012 (largely with international funds.

Antimalarials: the opportunity

• The antimalarial market is large and growing• The price per tablet is relatively stable for the leading 1st-line

medicine• A new entrant into this market has the opportunity to capture a

significant market share• There are only a few leading products to focus on:

artemisinin-based fixed dose oral combination formulations artemisinin-based fixed dose combination or co-blistered

oral formulations artemisinin-based fixed dose combination or co-blistered

oral paediatric formulations, preferably dispersible artemisinin-based single-ingredient formulations few other antimalarial medicines (mefloquine, sulfadoxine +

pyrimethamine)

page n °9


Medicines procured through Global Fund

page n °10


517,852,638350,751,060

481,44042,851,840

45,991,973957,928,951

1,446,392,966900,433,5001,322,020

651,525,694

21,243,7503,020,917,930

311,001,1440

63,488,93710,389,000

167,960,009552,839,090

49,834,21014,238,200

17,840,70085,309,1059,071,500

176,293,715

§ Some products in this category may have been procured under temporary exceptions, or may in fact be prequalified or otherwise approved but are not marked as such in the database.

WHO-prequalified and SRA-approved

WHO-prequalified and SRA approved 0 0 0

63,284,023 100 100

16,339,726 32 37

174,328,673 43 48

34,376,845 54 49579,395 1 5

26,415,330 42 29748,026 1 8

33,325,214 100 100

ERP-reviewed

4,019,408 12 2

50,910,526 100 100

401,393,302

2nd-line anti-TB medicinesWHO-prequalified only

SRA-approved onlyNot classified

35 57

1 1

136,528,035 34 30

SRA-approved only

SRA-approved only

SRA-approved only

WHO-prequalified only

3,373,855 10 11

14,298,187 43 31

11,633,764

ERP-reviewed

None of above§

None of above§

137,856 <1 <185,966,212 21 22

100 100

Antiretrovirals

49,472 <1 <1

4,432,526

8 54,323,942

WHO-prequalified only

1,146,175 2 4

Volume(SUoM**)

** In smallest units of measurement (SUoM), e.g. 1 tab/cap, 1 ml, etc.

ERP-exception# 1,164,427

* Total numbers have been rounded up or down.

# I.e. procured because benefit outweighed risk.

2 10

None of above§

Value (USD) Value (%)* Volume (%)*

29,051,211 57 54

WHO-prequalified and SRA approvedERP-reviewed

1st-line anti-TB medicines

AntimalarialsWHO-prequalified only

ERP-reviewed

What does the market look like for neglected tropical diseases?

Albendazole (for low-income countries): 1 to 1.4 billion tablets a year for preventive chemotherapy in children (2 to 15 years). In 2011, reported used was 302 million tablets out of which 112 million were procured (rest = company donations). Anticipated scale up: to 600 million tables donated, and 400‒800 million procured (for children & adults). Main buyers today = UNICEF, World Bank, DFID, USAID and some NGOs. (Also used for animal health.)

Praziquantal:global annual needs estimated at around 660 million tablets a year and coverage expected to scale up to that level. Most international procurement funded by above donors. (Also used for animal health.)

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What does the market look like for reproductive health?Donor medical contraceptives: market growth

page n °12


2006 2007 2008 2009 2010 2011$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

Orals - Progestin Only Orals - Emergency Orals - CombinedInjectablesImplants

What does the market look like for reproductive health?Donor medical contraceptives: market growth

page n °13


Profitability stronger than in other donor-funded therapeutic areas

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"Missing" or few products: examples

page n °15


Single ingredient or fixed-dose combination antiretroviral formulations for HIV/AIDS

Name Product type Strength Prequalified Under assessment

Raltegavir tablet 400 mg 0 0Etravirine tablet 100 mg 1 0Abacavir tablet (scored) 60 mg 1 0Efavirenz tablet (scored) 100 mg 0 0Tenofovir + efavirenz + lamivudine tablet 300 mg + 600 mg

+ 300 mg 1 1

Reproductive health medicines

Name Product type Srength Prequalified Under assessment

Norethisterone tablet 350 micrograms 0 0

Oxytocin injection 10 IU, 1-ml 0 0

Etonogestrel implant 68 mg 1 0

First to market maintains strongest market share

page n °16


PQP approval year and 2007‒2010 market share Global Fund

2007 2008 2009 2010

6 NaN 988116.16 1144942.7 239018.12

5 NaN 1680879.7 159426.3 958202.42

4 NaN NaN 1429562.25 144251.4

3 3297.81 721048.8 3777803.61 2408739.4

2 26565 7860440.92 13327621.17 25208137.34

1 5469939.49 13526467.82 26528033.72 24419008.71

5%

15%

25%

35%

45%

55%

65%

75%

85%

95%

Company Year PQP'd

Share 2007-2010 revenue

1 2005 53%2 2003 35%3 2005 5%4 2007 1%5 2009 2%6 2008 2%

ManufacturerLarge institutional markets

PQP approval

Other markets (e.g. USA) and benefits

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Prequalification opens the door to large markets

Business attractiveness: direct and indirect benefits

page n °18


PQP

Indirect Value

Capacity building

Improved quality of all products

Increased market share

Higher margins (non-institutional markets)

Image (internal and external)

Global Access

Contract manufacturing for local markets

Upgrading of regulatory processes (local)

Access to Donor-Sponsored VolumeDirect Value

Evolution of a manufacturer

page n °19


What are the sources of cost for PQ approval (1)?

page n °20 Business environment for WHO-PQed medicines | Amman | June 2013

ExpensesBioequivalence Studies

Formulation development

Lot ProductionStability Studies

HeadcountOn-Going Communications

Local RegulatoryIncidental Expenses

Capital Costs

Building or Upgrading Manufacturing Facilities

Acquiring Land for the Manufacturing Facility

Analytical InstrumentationSystems Upgrade

What are the sources of cost for PQ approval (2)?Bioequivalence studies:• largest portion of the expenses; about half of companies used outside

organizations, such as clinical research organizations or bioanalytical services companies, to carry out the work for them

• Estimated: US$ 100,000 ‒ 1,000,000; average = c.US$ 500,000.

Formulation Development• If the formulation not already being manufactured, the specific formulation has to

be developed. The cost of developing a new formulation varies. • Estimated US$ 150,000 ‒ 250,000, although could be much higher if formulation

development is highly complex. Lot Production• Critical step in PQ process is determining whether a company can consistently

produce product that meets specifications and product claims. Requirement for 2 batches. Cost of a production lot varies depending on complexity of API and drug formulation.

• Estimated US$ 50,000 per lot."Idle time" • New facility idle during approval process (the time between producing the lots for

the PQP application to the production of commercial products). Up to 2 years.


What are the sources of cost for PQ approval (3)?


Line Item DescriptionBioequivalence Low High

Patient AccrualStudies vary depending ont the particular claims. Here we assume from 30 patients to 50 patients at $3,000 apiece. This will vary depending on the indication. For example, HIV requires fewer patients than malaria.

$90,000 $150,000

Method Validation Ensuring that the analytical methods are appropriate. $15,000 $20,000

PK AnalyticsActual analytical process for measuring drugs and metabolites in biologica samples. Varies with size of patient pool.

$75,000 $150,000

Documentation Preparation Preparing the bioequivalence documentation for submission to PQP $20,000 $25,000 Reference material Comparator material for bioequivalence studies. $40,000 $50,000

HeadcountThree technicians for six months @$10,000 per year per tech. These technicians are carrying out the studies

$15,000 $15,000

Miscellaneous Any other costs associated with bioequivalence studies $20,000 $20,000Bioequivalence Subtotal: $275,000 $430,000

Formualtion Development

If the formulation is not already being used, the specific formulation has to be developed. This is the cost of the formulation development to mimic the existing product. If a product is new (e.g., pediatric formulation) the cost is much higher. The cost of these studies include formulation testing batches. The assumption is a single API.

$250,000 $750,000

Lot Production (no API)

Production of three lots of material at a lot size representative of full scale production. These materials are used in all PQP studies. This includes the cost of all materials, packaging, labor and overhead estimates. Cost estimate is for three lots ($3,000 each). One of the three lots could be available for sale.

$6,000 $9,000

Lot Production (Cost of API) API is about 75% of the cost of a product. $18,000 $27,000

Stability StudiesOngoing real time and accelerated stability studies according to accepted procedures. One man years @$10,000 per year for two years

$20,000 $20,000

HeadcountThree regulatory and administrative personnel for six months @$10,000 per year per person

$15,000 $15,000

Local RegulatoryCost of getting local regulatory approval for the countries where a company want to provide product. Average cost of $1,000 - $3,000 per country. Assume 10 countries.

$10,000 $30,000

Agent Fees and SamplesCost of managing the registration process within a country. Includes the cost of samples. This is estimated at $5,000 - $7,000 per country. Assume 10 countries

$50,000 $70,000

PQP Dossier Preparation Preparing the bioequivalence documentation for submission to PQP $25,000 $25,000On-Going Communications 1.0 man years @ $10,000 per year; spread over two years $10,000 $10,000PQP Fees At this time there are no application fees. $0

TOTAL: $679,000 $1,386,000

Line Item Description

Low HighCapital Costs Analytical Instrumentation HPLC, general lab equipment $50,000 $100,000 Analytical Lab Cost to build and equip an analytical laboratory for BE, QC and stability studies. $330,000 $1,000,000

Facility UpgradeCost of upgrading a facility to ensure product quality. Includes air quality and containing equipment.

$1,000,000 $3,000,000

Systems Upgrade Quality software systems $25,000 $200,000

New facilitiesCertain companies have to construct and outfit a new manufacturing facility, either because the capacity of the existing facility is insufficient or the cost of improving the systems would be greater than building a new facility.

Land Cost of land to build the facilities. $3,000,000 $5,000,000 Shell Cost of building the shell, including electrical and plumbing for the future facility. $5,000,000 $7,000,000

InfrastructureCost of outfitting the facility for pharmaceutical production. Includes equipment for formulation, filling and packaging. Also, includes all Quality Control Systems equipment and software.

$1,000,000 $25,000,000

BioBridge

BioBridgeStrategies

Cost Estimate

Investments will vary depending on experience of company (1)



• Manufacturers experienced in dealing with global regulatory agencies will have fewer investments in both capital and formulation development

• Manufacturers with existing dossiers will have fewer investments to make

• Formulation development may be necessary and depends upon the complexity of the medicine

• Companies without a WHO GMP-standard facility, will require renovations to meet GMP standards

• Companies new to the pharmaceutical industry will have to make major investments in capital infrastructure

Investments will vary depending on experience of company (2)


Investments1 for a global innovator with broad experience in stringent regulatory authority (SRA) approved products


Investments1 for a local manufacturer with no stringent regulatory authority experience


Investments1 for inexperienced manufacturers with little infrastructure

The business decision processA “PQ strategy” should not be seen in isolation but as a part of the company’s broader strategy that takes into account:

your geographic portfolio your product portfolio your target markets the type of investments required (human and financial) your company skills market size and future demand revenue potential cost of applying for PQP schedule profit potential degree of risk: no guarantee of securing tenders; forecasting can be

challenging; expected time to approval (especially for small companies with limited SRA experience); the higher cost of producing quality products (e.g. 5 - 10% greater than for non-quality-assured products).

and is supported at highest level of company.


Useful informationCurrent treatment recommendations: Standard treatment guidelines for eligible medicines referenced in WHO invitations for EOI. Indications, dosage & recommended alternatives.

Competitors in the market and in the pipeline: WHO PQP list of prequalified products & products under assessment for WHO-prequalification: http://apps.who.int/Global Fund indicative lists: www.theglobalfund.org/en/procurement/quality#lists

Volumes procured, and at what prices: Historical pricing information can give an indication on where the markets are going. WHO AMDS Global Price Reporting Mechanism (HIV drugs): http://apps.who.int/hiv/amds/price/hdd/Global Fund Price and Quality Reporting mechanism (PQR)(HIV, TB, malaria drugs): www.theglobalfund.org/en/procurement/pqrMédecins Sans Frontières (MSF) – Untangling the Web of Antiretroviral Price Reductions. http://utw.msfaccess.org/downloads/documents MSF – TB drugs under the microscope. http://www.msfaccess.org/our-work/tuberculosis/article/888 Current pricing information for some products is available on line: UNICEF product catalogue with indicative prices : https://supply.unicef.org/ (excludes anti-TB drugs)GDF product catalogue http://www.stoptb.org/gdf/drugsupply/pc2.asp Expected market outlook: E.g. UNITAID adopts a market-based approach to improve global access to key health products, and regularly publishes market landscapes for key health products. UNITAID HIV, Tuberculosis and Malaria Medicines Landscape. 2012. http://www.unitaid.eu/images/marketdynamics/publications/medicines_landscape_2012.pdf


http://apps.who.int/prequal/info_general/notes.htm

http://www.theglobalfund.org/en/procurement/quality

http://apps.who.int/hiv/amds/price/hdd/

http://apps.who.int/hiv/amds/price/hdd/

http://www.theglobalfund.org/en/procurement/pqr

http://utw.msfaccess.org/downloads/documents

http://www.msfaccess.org/our-work/tuberculosis/article/888

http://www.msfaccess.org/our-work/tuberculosis/article/888

https://supply.unicef.org/

http://www.stoptb.org/gdf/drugsupply/pc2.asp

http://www.unitaid.eu/images/marketdynamics/publications/medicines_landscape_2012.pdf

In summary

• PQP works with companies to improve the global availability of quality-assured medicines for populations in need

• PQP is a key component of the value chain for medicines for developing countries

• Application for prequalification is well-defined and consistent with applying for approval from other stringent regulatory authorities

• PQP has both direct and indirect benefits to manufacturers• Direct: access to large institutional markets• Indirect: capacity building, access to global markets, social

responsibility and improved image• But depending on a company’s experience with stringent regulatory

authorities and quality manufacturing facilities, the investment to be made in seeking product prequalification ranges from minor to significant


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