MWEF 4112: Industrial Pharmacy & Regulatory Control

Prepared by: Er Suling Lee Mun Yin Lim Ky Ying Mohd Khairuzzaman Bin Mohd Latif Mohd Shah Rezan Bin Hamzah Nursyahida Binti Abdul Rashid Tai Chu Hong Wong Siok Hui
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MEF 080011 MEF 080023 MEF 080026 MEF 080035 MEF 080036 MEF 080050 MEF 080062 MEF 080066

Introduction
There are differences between local (Malaysia) and global pharmaceutical market trend:
Medicines with the greatest demand Regulatory practice

Government policy
How to register pharmaceutical products from country outside Malaysia?

Increasing mergers and acquisitions.

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R&D

Pharmacogenomic

Generic drugs
6 areas of interests

TCM

Orphan drugs Halal pharmaceutical

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Government Policy & regulatory process

Government Policy in Malaysia

DRUG REGISTRATION Started since year 1986. Registered by DCA of the Ministry of Health. Under Poison Act, Dangerous Drugs Act, Drugs Act.
MANUFACTURERS, IMPORTERS & WHOLESALERS Licensed by the DCA. Must be in FULL compliance with the Code of GMP in order to be licensed. Currently 250 manufacturers licensed by DCA:
74 Pharmaceutical products 176 Traditional medicines 5 207 Cosmetics

Requirements regarding to GMP needed for registration of pharmaceutical products from country outside Malaysia
Requirements
Products are manufactured in country members of PIC/S or ICH.

Explanations
Certified GMP issued by National Drug Regulatory Authority (NDRA) of that country.

Manufacturer has been examined by NDRA member of PIC/S or ICH.

Products are manufactured in ASEAN countries.

Premises located in other country: certified GMP issued by that NDRA.

Certified GMP issued by NDRA of that country. Agreement among the ASEAN countries through ASEAN Sectoral Mutual Recognition Arrangement (MRA) for GMP Inspection of Manufacturers of Medicinal Products.

* Applied for the registration of new pharmaceutical products & re-registration of 6 pharmaceutical products which has been registered with DCA.

In case does NOT meet the stated requirements, consideration will be given if:

Authorization of application for registration of product is subjected to outcome of examination of manufacturer GMP by National Pharmaceutical Control Bureau (BPFK). 7

Good Manufacturing Practice (GMP)

Regulatory practice for the control and management of manufacturing & quality control testing of pharmaceutical products and medical devices. Based on PIC code. Updated 2 times/year Latest update = update no.12 in year 2011. Local GMP (Malaysia): GMP in practice 4 new chapters 3 updated existing chapters GMP regulations 1 new chapter 4 updated existing chapters Global GMP (WHO): 8 9 updates

Ranking of Pharm. Companies w0rldwide

Ranking
1 2

2004
Pfizer GlaxoSmithKline Sanofi-Aventis Johnson & Johnson Merck AstraZeneca Novartis Bristol-Myers Squibb Wyeth Abbott labs

2006
Pfizer GlaxoSmithKline Sanofi-Aventis Norvatis AstraZeneca Johnson & Johnson Merck Wyeth Bristol-Myera Squibb Eli Lilly

2008
Merck, Sharp & Dohme Pfizer GlaxoSmithKline Eli Lilly Johnson & Johnson Procter & Gamble Wyeth Bayer Novartis Abbott Labs
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2010
Pfizer Sanofi-Aventis Norvatis, GlaxoSmithKline Roche AstraZeneca Merck, Johnson & Johnson Eli Lilly Bristol-Myera Squibb

2011
Pfizer Novartis Sanofi Merck & co GlaxoSmithKline Roche AstraZeneca Johnson & Johnson Abbott Lab Eli Lilly

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4 5 6 7 8 9 10

Some of the top local companies

Pharmaniaga YSP Southeast Holding Asia Pharmaceutical Products

Kotra Pharma

Prime Pharmaceutical

Chemical Company of Malaysia (CCM) Hovid

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Bumimedic

Top 10 global product 2008

Rank Product 1 2 3 4 5 6 7 8 9 10 Lipitor (cholestrol) Plavix (anticlotting) Nexium [AstraZeneca] Seretide/Advair [GlaxoSmithKline] Enbrel (arthritis) Seroquel [AstraZeneca] Zyprexa [Eli Lilly] Remicade [Centocor] Singulair [Merck] Lovenox [Sano_-Aventis] Company Pfizer Sanofi-Aventis GlaxoSmithKline Merck Pfizer Abbott Roche Roche Novartis AstraZeneca Sales in 2008 $13.7 bln $8.6 bln $7.8 bln $7.7 bln $5.7 bln $5.4 bln $5.0 bln $4.9 bln $34.7 bln $34.4 bln

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Consensus sales forecasts for world's top 10 drugs in 2014

Rank Product Company Sales

1 2 3 4 5 6 7 8 9 10

Avastin (cancer) Humira (arthritis) Enbrel (arthritis) Crestor (cholestrol) Remicade (arthritis) Rituxan (cancer) Lantus (diabetes) Advair (asthma/COPD) Herceptin (cancer) NovoLog (diabetes)

Roche Abbott Pfizer AstraZeneca Merck Roche Sanofi-Aventis GlaxoSmithKline Roche Novo Nordisk
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$8.9 bln $8.5 bln $8.0 bln $7.7 bln $7.6 bln $7.4 bln $7.1 bln $6.8 bln $6.4 bln $5.7 bln

Read more: http://news.injuryboard.com/forecast-of-top-selling-drugs-2014.aspx?googleid=280340#ixzz1tboGTXwS

Local fast selling drug classes

Category RMmn US$mn

Vitamins, minerals & suppliments

Cough, cold & allergy

342.6
155.2

97.1
44.0

Dermatologist
Analgesics

146.6
93.5

41.5
26.5

Gastrointestinal
Others

52.2
42.4

14.8
12.0

Total
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832.6

235.9

Mergers and Acquisitions

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Rationale and reasons of merger and acquisition

Opportunity for new or acquiring company to increase revenue/reduce cost. Increase product range. Access to new technology platform Companies that acquire technology-focus firms relevant to their business application can develop a competitive edge. New technology can lead to aggressive product development and cost reduction. Increase in market dominance and growth opportunities.

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Rationale and reasons of merger and acquisition

Create economies of scale- generates cost efficiency. Better bargaining power with suppliers. To gain control of a blockbuster drug existing or potential. To gain entry into a high growth therapeutic area. Absence of proper research and development facilities. M&A enhance R&D productivity. Gradual expiry of patents and competition within specific pharmaceutical genres.

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INTEGRATION OF API MANUFACTURING

R&D

BUILDING ON API EXPERIENCE

Areas of M&A

INNOVATOR INTEREST IN GENERIC

EMERGING MARKET-FOCUSED DEALS

NICHE PRODUCTS AND BIOLOGICS

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INNOVATOR INTEREST IN GENERICS

As innovators have witnessed the growth in the generic industry and struggle to cope with pending patent expiries, many of them have turned to acquisitions and supply agreements to expand into generic drug markets as well. Example: Novartis - rebranding their numerous generics businesses as Sandoz (2003); one of the largest generic pharmaceutical companies worldwide, mainly through acquisitions.

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R&D
In recent years, pharmaceutical companies looked outward to help fill their weak pipelines through: 1) mergers and acquisitions (M&A), 2) in-licensing new compounds, and 3) developing strategic alliances and partnerships with other pharmaceutical or biotechnology companies. Investing in less profitable businesses provided stability by balancing risk inherent in the drug discovery and development process. Big Pharma not only began to merge with equal-sized peers to build sales forces and fill their pipelines, but also began to invest in small biotechnology companies. Initially, through joint ventures, pharmaceutical companies provided funding for R&D projects and later for developing and marketing products.
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R&D
Eventually, as the pharmaceutical industrys in-house R&D productivity decreased, pharmaceutical companies began to focus on biologics and acquire some of the more successful biotech companies. Merging cultures, retaining key researchers, and maintaining the innovative environment are just a few challenges faced by the acquiring company. Example: Johnson & Johnson appears to be the most successful at acquiring smaller biotech companies

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Table 1 Major Historical Mergers

Company Target company Year Deal $ Billion

Novartis (Ciba Geigy) Astra

Pfizer GSK (Glaxo Wellcome) Pfizer Sanofi Aventis (Sanofi)

Sandoz
Zeneca Werner Lambert Smith Kline French Pharmacia Aventis

1996
1999 2000 2000 2003 2004
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35 90 55 57 62 Celebrex Lipitor

Table 2. Major Acquisitions in 20052012-Pharmaceuticals

Company Pfizer MerckBayer Target company Wyeth $ billion Technology/product 68 4119.7 14.5 13.6 11 7.7 Prevnar, Enbrel Pharmaceuticals Pharmaceuticals Pharmaceuticals Pentaprazole, Daxas/Daliresp Hepatitis C Pharmaceuticals Schering PloughSchering Schering Plough Organon Takeda Gilead Sankyo Nycomed Pharmasset Daiichi

Abbott
UCB Abbott

Solvay
Schwartz Kos

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5.8 3.7
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Tricor, Trilipix, vaccines

Pharmaceuticals Humira, Niaspan

Abbott

Piramal

3.7

Generics

Table 3. Major Acquisitions in 2005-2012Generics/OTC/Consumer Health

Company J&J Teva Teva Novartis Mylan Novartis Target company Pfizer OTC Barr-Pliva Ivax Eon $ billion 16.6 7.5 7.4 6.8 Technology/product Consumer health Generics Generics Generics Generics Generics

Merck KGA generic 6.7 Hexal 5.3

Teva
Daiichi Sankyo Teva

Ratiopharm
Ranbaxy Sicor

5.0
4.0 3.4
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Generics
Generics Biosimilars

Sanofi Aventis

Zantiva

2.6

Generics

Table 4. Major Acquisitions in 20052012-Medical Devices/Diagnosis

Company Target company $ billion Technology/product

Novartis
Boston Scientific

Alcon
Guidant

39 in 2009 Eye care 28 in 2010 27.5 Medical Devices

21.3 Orthopedic

Johnson & Johnson Synthes

GE HealthcareLife Sci Technol Merck KGA

Danaher

Abbott diagnostic Applied Biosyst Millipore

Beckman Coulter

8.16.7
6.0 5.9

Diagnostic DNA sequencing

Equipment devices, equipment

Roche
Fresenius Fresenius

Illumina
Renal Care APP Pharm
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5.6
4 3.7

DNA mapping, hostile bid

Dialysis Abraxane (Nanotech)

Table 5. Major Acquisitions in 20052012-Biotechnology

Company Roche Sanofi Aventis Target company $ billion Technology/product Genentech Genzyme 47 20 Rituxan, Avastin, Herceptin, MoAbs, Oncology Orphan biologicsCerezyme, Fabrazyme, Renagel, Synvisc Monoclonal Antibodies

AstraZeneca Merck
Takeda Lilly Novartis Teva

MedImmune Serono
Millennium ImClone Chiron Cephalon

15.6 13.5
8.8 6.0 5.8 6.2
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Biologics
Velcade, Oncology Erbitux, Oncology Vaccines Nuvigil, Provigil, TreandaCNS, Oncology

Possible future mergers and acquisitions

Sanofi Aventis/Crucell: Sanofi could make a bid for Crucell to strengthen its position in vaccines. Eli Lilly/Takeda: The two companies have an existing collaboration in the diabetes arena. Johnson & Johnson/Vertex: J&J has a history of deals with Vertex and may want to acquire its pipeline of candidates for cystic fibrosis and rheumatoid arthritis. Bristol Myers Squibb/Amgen: Amgen's biotech pipeline would boost BMS's position in the industry.

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Research &Development (R&D)

Natural resources -rich in Malaysia Lower labor cost Presence of local institutes (IMR, FRIM) Strengths Inadequate knowledge and technologies on R&D Lack of skilled workforces on R&D Lack of expertise on R&D Lack of financial supports on R&D

Weaknesses

Presence of multinational company in Malaysia

Monopoly by big companies Neighboring country provide lower labor cost Increasing competition with neighboring country Threats

Opportunities

Generic Drugs
Less budget will be spend on R&D. Lower price High speed and high scale manufacturing facilities Public hospital bounded to one particular generic manufacturer. Higher trust in imported drug brands.

Strengths

Weaknesses

Malaysian government support purchase of generic medicine. Increase demand of healthcare product. Increase number of public hospital, Patent expiry of blockbuster drugs

Competition of generic manufacturers Patent infringement

Opportunities

Threats

Orphan drug
Pharmaceutical substance that has been developed to treat rare disease (orphan disease). Gauchers Disease, Huntingtons Disease and several cancer sub-types. Generally neglected by pharmaceutical companies. Thus, there is a need to boost R&D investments in orphan drug manufacturing. Orphan Drug Legislation (ODL) make investments in orphan drug manufacturing.
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Drugs Xenazine Banzel

Generic tetrabenazine rufinamide

Indication Huntingtons disease Seizures involved in Lennox-Gastaut syndrome

Approval Year 2008 2008

Curosurf

Pulmonary surfactant replacement, porcine

Respiratory distress syndrome in premature infant Acromegally Multiple myeloma Myelodysplastic 30 syndrome

2007

Somatruline Depot lanreotide Thalomid Dacogen thalidomide decitabine

2007 2006 2006

Orphan Drugs
Small-sized company Orphan Drug Laws 1984 Small biotech company Low average per capita income Unattractive for R&D/lack of R&D investment Rare disease in poor countries High price Lengthy, costly and risky development Weaknesses Low return on investment Lack support from Insurance companies Poor countries distributing, selling protection problem Lack regulation Threats

Strengths Ascending growth trend of rare disease Incentives-ODA, FDA, EU Less competition ODL 1984-boost Investment/R&D Opportunities

Halal Pharmaceuticals
Halal pharmaceuticals: Halal (Permissible according to Islamic Law) + Pharmaceutical products. Malaysia 3rd Industrial Master Plan states that by 2008 Malaysia will be the centre for: - The production and distribution of halal products - Halal service providers - Reference on the halal standard -R&D for halal matters

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Halal Pharmaceuticals
MS2424:2010 (P): Halal Pharmaceuticals Guideline - 1st Halal pharmaceutical guidelines developed by the Industry Standards Committee on Halal Standard (ISC I). - The document has undergone a process in accordance to the international standards requirements such as ISO. Current leader in production: Thailand

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Halal Pharmaceuticals
Quality, safety, and efficacy + halalan toyyiban Existence of HDC Adherence issue to standards Lack of Halal standard Additional requirements Enforcement & monitoring Law

Strengths

Weaknesses

Muslims demand Government support Promotion platform Malaysia = OIC member Growing Muslim market

Lack Halal knowledge Clashes in ulama opinions (fatwa) Conventional pharmaceuticals

Opportunities

Threats

Traditional & complementary medicine (TCM)

Practices usually used to enhance or complement standard treatmet, such as vitamins, dietary supplements, herbal preparation, magnet therapy, aromatherapy, etc (National Cancer Institute US)

Global Scenario
Global trade in natural products
2006 RM 777 billion 2020 RM 2 trillion (expected) Growth rate 30%
Populations using traditional medicine for primary care
Ethiopia Mali Myanmar Rwanda Tanzania Uganda 90% 75% 70% 70% 60% 60%

Populations in developed countries who have used complementary and alternative medicine at least once
Germany Canada France Australia USA 80% 70% 49% 48% 42%

110 countries requires registration for TCM products

Local scenario
69.4% malaysian used TCM (2004) Annual sales of Vitamin, supplement, herbal product: RM 246.2million Agriculture Entry Point Projects (EPPs) under the National Key Economic Areas (NKEAs) in the Economic Transformation Programme (ETP). Its target: a gross income of RM3.25bil by 2020. Malaysian has lots of unique herbal with medicinal value: kacip fatimah, tongkat ali, misai kucing, hempedu bumi, dukung anak, ginger,mengkudu, roselle, pegaga, mas cotek. Multi-ethnic, multi-cultural and multi-religious population, various source of TCM Chinese, Malay, Indian

Timeline of TCM industry in Malaysia

1992: Registration available 2009: development of TCM guideline on herbal therapy as adjunct cancer 1996 : T&CM unit formed by ministry treatment of health 2007-2010: TCM unit set up in 8 1997 : GMP implemented government hospital 1999 :TCM practioner bodies formed on 2000: Formation of herbal medicine R&D IMR, FRIM, MARDI, universities 2001: National policy on TCM TCM division in ministry of health 2008: launching of online registration for TCM practitioner

SWOT
proper regulation available rich in unique medicinal plant multi ethnicity- various source national policy favors development of TCM product lack evidence of safety and efficacy not as standard treatment in Msia

Strengths

Weaknesses

High worldwide and local demand TCM unit in local hospital Emergence of TCM roles in incurable disease (HIV, cancer, malaria, etc) Increasing financial status and health awareness of citizens Opportunities

adulteration issue lack international standard environmental issue great competition TCM usually used as primary care in underdeveloped countries

Threats

Pharmacogenomics (Personalized medicine)

Used synonymously with personalized medicine Identifying specific characteristics of individual gene sequences and tailoring treatment accordingly

Current trend
Successful personalized medicine Herceptine

Companies involved

GSK Pfizer Genaissance AstraZeneca

Industry Pharmacogenomics Working Group (I-PWG)

Abbott Amgen ARCA Biopharma Astellas Biogen Idec Boehringer Ingelheim Bristol-Myers Squibb Eisai Eli Lilly GSK Johnson & Johnson Merck Millenium Novartis Orion Pharma Pfizer Purdue Pharma Roche/Genentech Sanofi Aventis Teva Pharmaceutical

Forecast
Expected to be increasingly used over the next ten years Areas expected to produce stratified medicines:
Infectious disease Metabolic disorders (diabetes)

SWOT analysis
Incentives from government High Technology Pioneer Status High Technology Investment Tax Allowance Endorsement from MOH Strengths Rapidly growing market Increasing interest in public Small number of competitors Abundance of diagnostic companies in Malaysia (companion diagnostic developers) Limited resources/capital Lack of expertise Lack of high technology equipments Weaknesses

Limited market Lack of legislation to protect individuals against discrimination Limitations on the amount of advertising and promotion for pharmacogenomic drugs Threats

Opportunities

Conclusion
The field of industrial pharmaceutical manufacturing had grown and will keep growing due to several factors. Factors like strategy of management (i.e merger & acquisition), innovations and R&D had and will contribute to the manufacturing growth of local and global industries.

Conclusion (contd)

Niche busters industry had shifted the focus of pharmaceutical companies on the current economic situation and huge generic competition to a new business model (orphan drugs). Revenues prediction is one of the way to forecast or predict the product sales and organization profits by the most of the pharmaceutical companies over the world.

References
. Globinmed:Global Information Hub On Integrated Medicine. (2010). Traditional & Complementary Medicine Retrieved 1 May 2012, from http://www.globinmed.com/ World Health Organization. (2008). Traditional medicine Retrieved 1 May 2012, from http://www.who.int/mediacentre/factsheets/fs134/en/ Cohen, J., Gangi, W., Lineen, J., & Manard, A. (2004). STRATEGIC ALTERNATIVES IN THE PHARMACEUTICAL INDUSTRY Retrieved 3 May, 2012, from http://www.kellogg.northwestern.edu/biotech/faculty/articles/st rategic_alternatives.pdf . Global Research & Development Incentives Group. (2012) Retrieved 3 May, 2012, from http://www.pwc.com/en_GX/gx/tax/assets/pwc-global-researchand-development-brochure-2012.pdf

References
HARDING, D. (2010). GAINING MARKET SHARE IN THE GENERIC DRUG INDUSTRY THROUGH ACQUISITIONS AND PARTNERSHIPS Retrieved 2 May, 2012, from http://thomsonreuters.com/content/science/pdf/ls/newport-deals.pdf Maggon, K. (2012). Mergers and Acquisitions Review: Pharmaceutical and Biotechnology Industry Retrieved 2 May, 2012, from http://mergersacquisition.wordpress.com/2012/03/11/pharma-biotech2005-2012/ Malaysian Organisation of Pharmaceutical Industries. (2012). The Malaysian pharmaceutical industry. Retrieved May 8, 2012, from http://www.mopi.org.my/ MOH. (2012). Direktif Mengenai Syarat Pendaftaran Produk Farmaseutikal Dari Luar Negara Berkaitan Keperluan Amalan Perkilangan Baik (APB) Retrieved 5 May, 2012, from http://portal.bpfk.gov.my/newsmaster.cfm?&menuid=52&action=view &retrieveid=195

References
Shields, M. Money for Nothing Retrieved 2 May, 2012, from http://www.ngpharma.com/article/Money-for-Nothing/ . Update Forecast & History: GMP Manual (2012) Retrieved 4 May, 2012, from http://www.gmp-publishing.com/en/gmp-newsupdates/gmp-aktuell/12-update-gmp-manual.html WHO. (2011). WHO EXPERT COMMITTEE ON SPECIFICATIONS FOR PHARMACEUTICAL PREPARATIONS Retrieved 4 May, 2012, from http://whqlibdoc.who.int/trs/WHO_TRS_961_eng.pdf#page= 106 Zain, M. (2008). Mergers and Acquisitions: The Rationale and Benefits Retrieved 2 May, 2012, from http://dinarstandard.com/leadership/mergers-acquisitions-therationale-and-benefits/

Thank You! =)

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