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Talking about the R&D and cost of APIs under the background of 4+7 volume procurement

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Article by Yanzu Wu at Changchun BridgeOn December 6, 2018, in the dark night sky of China’s generic drug market, a dazzling lightning illuminates the shocked people, followed by Long Lei The sound awakened the people who were still in their dreams, and the heavy rain that followed even filled the people who had nowhere to hide. On this day, China’s first batch of 11 cities in pilot countries organized centralized procurement with volume, commonly known as “4+7” volume procurement. The pre-winning results were announced. The unprecedented 52% average price reduction was staggering . Later, when some people in the industry questioned whether it could be implemented, the national leaders made repeated orders, and the National Medical Insurance Bureau decided to kill the results, and until April 1, 2019, the full-scale procurement was launched in 11 cities. On April 16, the Medical Insurance Bureau announced that 27.31% of the total agreed purchases of the 25 selected varieties in 11 pilot cities have been completed, exceeding expectations. Many provinces and cities across the country have successively issued policy linkage 4+7 price reductions, and many unsuccessful products have also taken the initiative to significantly reduce prices. An obvious conclusion is: 4+7 volume procurement is the top-level design of the country, which reflects the firm will of the country. The most significant impact brought by 4+7 volume purchases is to reduce the price of patent expired original research drugs and their generic drugs, which makes generic drugs small profits. The new situation requires generic drug companies to strictly control costs to maintain a certain profit. After mass procurement eliminates the promotion link, APIs usually become the main cost of generic drugs. At this time, some pharmaceutical companies that can be self-sufficient in raw materials and realize the “upstream and downstream integration of the industrial chain” have a significant advantage. The common saying is “no middleman makes the difference.” Some pharmaceutical companies that have not achieved self-sufficiency of APIs may consider getting involved in this link. This article briefly introduces the development and production process of generic APIs and the pain points of cost control, and discusses the development trend of China’s API industry. R&D and production process of generic drug original drugsAPI refers to the process of chemical synthesis, microbial fermentation, natural product separation, semi-synthesis (based on fermentation products or natural products). Continue to synthesize) the active ingredient (API, active pharmaceutical ingredient) obtained through one or more chemical unit operations and used in the manufacture of pharmaceutical preparations (preparation). The research and development process of generic APIs is basically as follows. Patent analysisAnalyze the intellectual property rights of the target API, including the patents that the original researcher and other companies have held and are applying for the target API, including compounds and intermediates , Crystal type and process patents. Analyze in detail the content and duration of the patent protection, and pay attention to avoiding or cracking Phenibut Suppliers in the subsequent steps. Design a synthetic routeGenerally, the synthetic route of the original research manufacturer is preferred, or you can design your own new synthetic route. According to the structure of the target API, refer to relevant literature, comprehensively analyze, determine the synthetic route with feasible process, reasonable cost and relatively high yield. The route needs to consider starting materials, intermediates, reaction solvents, post-treatment solvents and key catalysts, etc., as well as the availability of raw materials, the reaction conditions of the synthetic route, environmental protection and safety, and product purification. Take an example that may not be very appropriate. In the famous American drama “Breaking Bad”, chemistry teacher Walter White used two different routes to synthesize methamphetamine (methamphetamine) before and after, with very different raw materials and operations. The first method extracts pseudoephedrine from cold medicine, extracts red phosphorus from the side of the match box and the head of the match, and then uses the Nagai reaction (hydroiodic acid/red phosphorus) to reduce and dehydroxylate to obtain the target compound with 96% purity. The second method uses P2P (phenyl-2-propanone, phenyl-2-propanone) and methylamine as raw materials to carry out reductive amination reaction to obtain the target compound with a purity of more than 99%, but it contains trace impurities. Light blue, it became the famous blue ice in the southwestern United States in the play. Figure 1. Synthesis of methamphetamine by Nagai reaction

Figure 2. Synthesis of methamphetamine by reductive aminationProcess optimizationThree major tasks of process optimization To: improve yield and reduce costs; avoid patents; related substances comply with ICH regulations. Including reaction parameter optimization, purification method optimization, structure confirmation, impurity research (confirmation of impurity structure, source mechanism analysis, separation method), crystal form research (crystal form and particle size influencing factors, control methods). Process optimization requires special consideration of safety and environmental protection. The Ministry of Environmental Protection issued the 2016 “National Advanced Pollution Prevention and Control Technology Catalog (VOCs Prevention and Control Field)” announcement involving 18 reactions. The types of solvents used and the types are determined. Then consider how much waste liquid and solid waste are generated; try to eliminate solvents and reactions that cause great safety hazards. The explosion of a chemical plant in Jiangsu in 2018 made safety supervision even more stringent. Step-by-step amplificationAfter the staged test is completed, it must be discussed and summarized. At least 5 consecutive batches, all inspections are qualified, and the stability of the process is guaranteed. On the basis of the success of the small test, a pilot test will be carried out. The pilot test considers the matching of equipment and process and the applicability of the process, and try to consider the process suitab Phenibut Manufacturers le for the existing equipment to save costs. Through the research of pilot-scale and industrialized production processes, a stable and feasible process is determined to provide APIs that meet the requirements for the large-scale production of pharmaceutical preparations. Quality research(1) Literature research: According to the literature, analysis methods and quality standards in the pharmacopoeias of various countries, the quality research plan is initially determined. (2) Analytical method exploration: including the exploration of the detection methods of starting materials, intermediates and finished products, try to use one method to control, if the compound properties are different, establish separately if necessary Quality control methods. (3) Analytical method verification: the analytical methods of starting materials and intermediates can be verified according to actual conditions; API analytical method verification generally includes: content methodology, related substance methodology, residue Solvent methodology and other property methodology research. (4) Pilot batch testing: It is necessary to test the starting materials, intermediates and finished products of the three pilot batches according to the established quality standards, and issue a test report. Carry out cleaning verification methods and drug residue testing, and issue a cleaning verification report. (5) Comparison with commercially available samples: If the original drug substance is available for purchase, conduct a comprehensive quality comparison study with it; generally, it is difficult to obtain the drug substance, and you can conduct a comparative study on the impurity profile and impurity quality with the commercially available preparations. (6) Stability: Research on influencing factors, acceleration and long-term stability. It needs to be particularly emphasized that the whole process of API production needs to comply with GMP regulations, and the material standards, central control standards, product standards and equipment verification requirements are formulated according to GMP management requirements. Pain points of API cost controlThe cost of API is basically composed of three parts: raw material cost, labor cost, and manufacturing cost, referred to as “materials, labor, and expenses”. There are four main factors that make it difficult to control the cost of raw materials. Rising prices of basic chemical raw materialsIn the cost structure of APIs, the cost of raw materials accounts for the main part of the total cost, and the impact is the most direct and huge. As the price of the international crude oil market has risen, the price of its derivatives has been driven up. Commonly used solvent raw materials such as benzene, toluene, ethyl acetate and acetone have risen by more than 10%. In the context of the general increase in the prices of basic raw materials, some purchasers lack rational thinking about the rise and fall of the prices of raw materials, and follow the trend to buy them. They often miss the best time to purchase goods, which will also cause the prices of raw materials to remain high. Gradually incr Phenibut on sale easing labor costsInflation and average wage growth will stimulate employees’ demands for salary increases. However, when the profit of the business operation does not meet the satisfactory expectations, the time and extent of the wage increase is often a game between the company and the employees. In order to reduce labor costs, companies often use labor dispatch. However, the production of raw materials, especially chemical reaction positions, requires certain chemical knowledge and experience. Short-term training and intensive education are not qualified for the job. Investment in hardware facilitiesThe production of raw materials requires a large investment in hardware. The required equipment is arranged according to the unit reaction, including reactors, storage tanks, pipelines and transmission equipment, etc. , The one-time investment is very considerable. At the same time, since most chemical reactions use acid, alkali, flammable and explosive materials, equipment maintenance also requires capital investment. The annual overhaul cost of a medium-sized API manufacturer is more than one million yuan, which is evident in the huge cost. Others, such as environmental protection and safety facilities, require funds. Of course, the cost of equipment and facilities does not enter the cost all at once, but is reflected in the cost through annual depreciation. Financial pressure brought by the long production cycle of APIsThe synthesis of APIs is a complex chemical process rather than a physical process, requiring a relatively long production cycle. It takes about half a month to conservatively estimate from the beginning of the raw material storage inspection to the qualified storage of the finished product inspection, even if the chemical reaction is the smallest step. From the point of view of on-site production, the feeding process is continuous rather than intermittent. Therefore, there will be a large number of products in the whole process. In addition, the synthesis of an API requires a lot of raw materials, so the production cycle is long. One of the factors causing pressure on capital costs. In addition to the above main factors, the improvement of environmental protection and regulatory standards has also increased the overall cost of APIs. Future development trend of China’s API industryComposite modelAt the same time, we are engaged in the composite model of APIs and preparations to reduce intermediate link costs and further reduce costs. Improve the profit level of generic pharmaceutical preparations. At the same time, surplus production capacity can also be used to provide APIs for other companies. Transformation and upgradingFrom simple bulk to special features, or from generic APIs to patent APIs. Or technical upgrades for biopharmaceutical raw materials, such as peptides, polysaccharides, and cell therapy products, to achieve higher profitability. Concentrated scalePharmaceuticals companies with good operating conditions can use their own advantages to expand their scale and gain oligarchs’ bargaining power; or acquire new production capacity, new technologies, and new markets through mergers and acquisitions. The free public image of the cover is from Aaron Burden on Unsplash, thanks. If you have any thoughts on this article, please leave a message Zhongrui Consulting~Zhongrui Consulting-Focus on China’s pharmaceutical industry research and consulting