Czech Republic And Poland - The Most Attractive Locations For Pharmaceutical Sourcing In CEE
According to an analysis carried out by PMR and described in the recent report "Pharmaceutical contract manufacturing and API sourcing in Central and Eastern Europe", the most attractive countries in the region for finding partners for contract manufacturing and API sourcing are the Czech Republic and Poland. One of the main advantages of the Central and Eastern Europe (CEE) region as a whole over China and India, which pose a serious competitive threat, is the much lower level of counterfeiting, which will be minimised by impending EU legislation.
Financial crisis makes pharma companies tap into contract manufacturing Drying up of R&D pipelines, overinvestment in previous decades, regulatory hurdles which delay new approvals and losing patent protection on many of their blockbuster products have forced manufacturers to sell their production plants and reduce their workforces. As a consequence of these problems - made worse by the global financial crisis - big pharma companies are tapping into the global contract manufacturing market more and more often, including the CEE area analysed in the report.
The pharmaceutical industry in the Czech Republic is one of the most developed in the CEE countries. There are many companies which specialise in API sourcing and contract manufacturing. The biotechnology industry is developing rapidly and providing a platform for specialisation. There are also many companies focusing on the manufacture of dietary supplements under contract.
Pharmaceutical companies looking for sourcing and contract manufacturing opportunities may also benefit from the Polish pharmaceutical industry, where they can find companies with a long tradition of producing natural pharmaceutical raw materials, along with products based on biotech methods and chemically manufactured API and finished dosage forms. Other advantages of the country's economy include the prominent role of science and highly ethical corporate behaviour.
Both countries are also members of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (jointly referred to as the PIC/S), which guarantees a high level of implementation of the internationally recognised GMP rules.
Europe has lost its competitive edge in API production
The more prohibitive operating costs of the GMP-compliant production (in general some 25% of site operating costs) of off-patent API, along with a dramatic increase in other industry-related regulations, has made European API manufacturers increasingly uncompetitive in terms of the costs of API production in the last 20-30 years. As a result many European API producers have been squeezed out by competition from Asia. The situation has been exacerbated by the fact that in many cases EU regulations have not kept pace with dramatic changes in the marketplace. The lack of proper oversight, control and inspection of, for example, importers of API from Asia has encouraged the non-compliant and illegal trading of such substances in Europe.
At present one of the main advantages of companies based in the CEE region, particularly those which are members of the EU, given the considerable competitive threat posed by China and India, is the much lower level of counterfeiting. This is complemented by their cultural and geographical proximity to Western companies, combined with labour costs which are still lower than those of Western countries.
EU finds solution to counterfeit API
Methods of producing counterfeit drugs have became increasingly sophisticated. For example, some 10-20 years ago most counterfeit drugs did not contain any API. Now, although there are many counterfeit API, another trend has appeared: an increasing number of counterfeit drugs have real API. It is estimated that there are some 5,000 rogue API manufacturers in China, and about 3,000 of them are not even Chinese GMP compliant. The European countries in which counterfeit drugs are the most widespread are Russia and Ukraine.
In December 2008 a number of amendments to Directive 2001/83/EC were proposed. Certain changes also pertain to API, their main objective being to make medicines on the European market safer by imposing stricter requirements on API imported from third countries.
Firstly, manufacturers of medicinal products will be obliged to audit all companies which manufacture the API they use. In addition, various proposed measures will ensure that imported APIs have been manufactured in accordance with rules which establish safety standards matching those in the EU. Member states will also have to improve inspections – this concerns in particular those countries in which the level of public health protection in terms of the regulatory framework, control and supervision does not match the EU.
About PMR Publications
PMR Publications (www.pmrpublications.com) is a division of PMR, a company providing market information, advice and services to international businesses interested in Central and Eastern European countries and other emerging markets. PMR key areas of operation include market research (through PMR Research), consultancy (through PMR Consulting) and business publications (through PMR Publications). With over 13 years of experience, highly skilled international staff and coverage of over 20 countries, PMR is one of the largest companies of its type in the region.
SOURCE: PMR Publications