Seqens, Inc. (www.pcisynthesis.com), a 15-year-old pharmaceutical manufacturer of new chemical entities (NCEs), generic active pharmaceutical ingredients (APIs) and other specialty chemical products, today announced a list of trends it thinks will impact the emerging biotech and generic drug industries in 2014.
- Increased regulatory scrutiny: The FDA continues to expand its scope for oversight – most recently with a bill signed into law in November, the Drug Quality and Security Act. There’s no question we need regulatory scrutiny to minimize contaminated, counterfeited or adulterated drugs getting in the hands of patients. Quality control is essential but at some point scrutiny places significant burdens on manufacturers without actually improving the outcomes for consumers. Increased scrutiny is driving some manufacturers to shut down and lay off their employees.
- Producing generic drugs will continue to get more expensive: As a result of fees imposed by the Generic Drug User Fee Amendments of 2012 (GDUFA), fees for applications and Drug Master Files (DMFs) could reach $30,000 per DMF, which squeezes smaller companies. GDUFA’s higher fees increase the risk factor for small companies, stifling the industry, and increasing the prices U.S. consumers must pay for generics.
- Drug shortages: Between fewer U.S. manufacturers and increased risk and fees for smaller manufacturers, expect drug shortages in 2014 and beyond. Scarcity will make those drugs more expensive, and may drive imports of foreign-made generics to meet demand. At this point, many foreign manufacturers are not inspected to the degree that U.S. firms are – and that could lead to quality issues that we all want to avoid.
- There could be a biotech bubble: More biotechs are going public, driven by VCs looking for a liquidity event. Interest is strong but the question of whether we’re in a biotech bubble continues to be raised, and that becomes something of a self-fulfilling prophecy.
- Recruiting will continue to be a big issue: We expect that finding qualified people for the pharma industry will remain a challenge in 2014. As an industry we need to encourage students to get the kind of education that will equip them with the right skills and approach to be productive in today’s environment. Meanwhile technology can help some people to telecommute. Unfortunately, telecommuting may not be the answer for CMOs that need people in the lab.
- Wage inflation in India and China could drive demand for U.S. manufacturing: Because wages for skilled technicians in India and China continue to jump, virtual biotechs and others may decide to bring their manufacturing back to the U.S. If there are any contamination or counterfeiting incidents in the first half of 2014, we would expect a shift of manufacturing to the U.S.
“We expect 2014 to be another challenging year as the industry addresses the implications of the Affordable Care Act (ACA or Obamacare) as well as the implications from increased FDA scrutiny. We’ve found we help our clients by providing them with insights into new trends that can help them prepare and manage for the future – especially when they face increased risk and lower margins,” said Ed Price, President of Seqens.
Seqens is a 15-year-old custom chemical manufacturer of new chemical entities (NCEs), generic active pharmaceutical ingredients (APIs), and other specialty chemical products. A contract manufacturing organization (CMO), Seqens provides emerging and mid-sized pharmaceutical companies access to the expertise needed to develop and manufacture complex small molecules and APIs used in generic pharmaceuticals. To learn more about Seqens, its proprietary NCE development activities and process R&D capabilities please visit www.pcisynthesis.com.