At InsightCity, we consider ourselves fairly knowledgeable about the pharmaceutical market. That said, we were a bit taken aback to learn that until July 2016 if you wanted to hold a commercial drug license in China, you had to manufacture the product using only in-house facilities. Yep, no outsourcing of drug manufacturing. In case you didn’t know, using a Contract Manufacturing Organization (CMO) is big business in the US and Europe. China has started a 3-year pilot program called the Marketing Authorization Holder (MAH) System. There was a recent summit to discuss MAH progress and as one might expect, Chinese CMOs are considering themselves quite fortune-ate (too much?). Look for homegrown Chinese CMOs and established western CMOs to start down the joint venture path. Also, 2018 is the year of the Earth Dog in China. Now you know.
Puerto Rico’s status of not really being a United State but still being part of the United States (explained here) has made it very attractive for medical manufacturing. For instance, companies there can create “US-made” products from factories incorporated as foreign subsidiaries, which means paying a 4 percent excise tax instead of US income tax. This has saved a lot of money for companies like Amgen, AZ and AbbVie, but the US tax overhaul may change that. The proposed bill would place a 20 percent excise tax on all offshore transactions. That may incentivize companies to change their offshore tax avoidance policies, perhaps choosing a different island to do business on. All of this while Puerto Ricans are facing $100 billion in storm damage. Click here to help with that.
Good news, bad news. Companies that are developing cutting-edge gene therapy recently got some good news when the FDA approved the first gene therapy in the US and indicated they will expedite the approval of experimental gene therapies. Great. The bad news? Genes (specifically, modified genes) are in high demand. A recent NY Times article explains that “firms that can (manufacture the genes) are swamped with orders and requests.” Organizations are having to sign-up years in advance to secure manufacturing slots, often before proof-of-concept is complete. Risky. Expensive. Decisions have to be made and one company, Bluebird Bio, has taken the bull by the horns, securing their own manufacturing. We’ll keep you updated, and for an InsightCity approved view of men and skinny jeans go here.
[Editor’s note: two-thirds of InsightCity approved anyway.]
Generic company profits are eroding and, according to an article in Bloomberg, this can be traced to the upstart of family-owned drug manufacturing facilities in India. While “family-owned manufacturing facilities in India” might raise both eyebrows for people in drug markets around the globe, India’s Union Health Ministry has proposed new quality checks on its drug manufacturers. The increase in generics competition has caused downward pressure on prices, giving fits to giants like Teva, Mylan, and Sun—all of whom are feeling the squeeze. The editors at InsightCity are pleased the low-cost regions aren’t driving down our earnings. Maybe our $0 (USD) in revenue explains their lack of interest. Nah, they just couldn’t compete.
Last week, Merck CEO Kenneth Frazier was among the first of many business leaders who left the White House’s American Manufacturing Council. The manufacturing heads cited President Trump’s comments following the protests and violence in Charlottesville, VA as the reason for their departure… and it snowballed from there with more CEOs resigning until Trump just dissolved it. Frazier’s presence on the council demonstrated the importance of drug manufacturing to the larger US manufacturing economy, and some lauded him for generating Positive Pharma Press™ by giving up his seat at that table. What’s Frazier up to next? Well according to the president, “Now that Ken Frazier of Merck Pharma has resigned from President’s Manufacturing Council, he will have more time to LOWER RIPOFF DRUG PRICES!” Ouch, Mr. President.
But who doesn’t need a little constructive criticism? From the same Dutch company that gave us the Access to Medicine Index, comes a new benchmarking report for the vaccine manufacturers out there. The comprehensive analysis rates manufacturer performance on 3 criteria including Pricing, R&D, and Manufacturing/Supply. Wondering how you rank in the report? Sneak peek: GSK is killing it, Pfizer…not so much. Also included in the analysis is market outlook, priority diseases, and a look at access in underdeveloped global regions. A pretty informative read, not to mention free! (Not a product endorsement, we promise).
Ahhhhh, the lure of low corporate taxes. According to The Irish Times, Pfizer will be spending €300-400 million to expand manufacturing capabilities in its legacy Wyeth plant located in Ireland’s capital city. In spite of almost certain future competition from biosimilars, it seems Pfizer expects demand for its biologics to increase, including Enbrel—the Rheumatoid Arthritis blockbuster—and Prevnar—the vaccine for things we can pronounce but not spell. Increasing capacity to manufacture biologics is not quick. Pfizer expects to have the facility operational by 2020.