Up To Task - Facing a huge patent cliff and a less-than-robust pipeline, pharma companies must look to customized and personalized medicines. This is where API manufacturers are expected to step up to the plate.

For our API business, Asia is ...

Dr. Markus Blocher (Dottikon): ... still a minor market today. Margins are rapidly decreasing with increasing number of players attracted by high growth rates of non-branded and branded generics in pharmerging markets such as Eastern Europe and Latin America besides Asia. In addition, intensified price pressure by regulation is taking place as governments seek to keep healthcare spending under control, similar to industrialized countries. China plans to motivate scientists from the U.S. with hundreds of billions to start up biotechs within China, and Indian generics manufacturers are increasing their efforts to develop their own branded drugs.

Despite these facts, the custom manufacturing for Asian biotechs and drug innovators is still in the introduction and years from entering the growth phase. Therefore, for the time being, Asia remains a source for low-cost starting material and generic APIs, and a direct and indirect market to sell high-valued intermediates finally ending up in generics.

Dr. Andreas Dietrich (Vice President Launch and Strategic Products at Boehringer Ingelheim):... remains important. Macroeconomic indicators point to continued growth of the pharmaceutical market. Of course, each region of the world influences growth in different ways.

Changes in demographics in Europe, rising disposable income in Asia, wider availability of health insurance schemes around the world are just a few changes to mention here. The Asia-Pacific pharmaceutical market has been emerging as a fast growing region over the past decade. The reason for these changes can in particular be attributed to a favorable manufacturing cost environment and the need to access better healthcare.

Consequently, Asia has seen important developments in contract manufacturing, especially for APIs and generics, and has to no surprise positioned itself as a frontrunner of global API production.

We believe this positive development will continue to strengthen Asia as a global API production hub, a trend which is predominantly driven by continued pressure around the world on drug product cost, as well as by technology and partnership advancements.

Heinz Sieger (CEO, CU Chemie Uetikon): ... an interesting market, offering opportunities of economic growth. With the two largest populations residing in India and China the drug market in Asia and in the other E7 countries is expected still to grow much faster than in the developed markets and will reach a market share of about 20% in 2020 that means will at least double within the next nine years.
Especially because of our GMP compliance, our high and reliable quality in general and the trend setting GMP design of our production facility, we see good chances to grow our business in these countries.

The most promising trend in APIs is ...

Dr. Markus Blocher (Dottikon): ... that the number of new drug approvals by the FDA in the first half of 2011 has already exceeded the total of 2010 approvals, despite high attrition rates and therefore low number of NDAs for approval. The majority of approvals involves significant improvements over existing treatment options and may mark the beginning of a new era of customized and personalized medicines. Indications and treatments of the newly approved drugs typically address small and highly targeted patient groups.

The novel chemical core structures of these APIs often require state-of-the-art technology in the synthesis. However, their significantly lower annual volume needs economically disfavor commoditized monoplant manufacturing. The demand for rapid pro-cess development, reliable scale-up and safe manufacturing of commercial API quantities is increasing. This is a clear effect from the deferral of chemical process development to later clinical phases with the aim to avoid R&D spend on unsuccessful projects; and the need to substitute each lost blockbuster by a multiple of smaller new drugs.

In essence, the future successful contract manufacturing consists of exclusive synthesis by partnering with an experienced, reliable, highly flexible supplier having the right versatile technology portfolio to tackle today's chemical manufacturing control challenges.

Dr. Andreas Dietrich (Boehringer Ingelheim):... will be influenced by several factors. Finding new and innovative synthetic routes, and continued manufacturing efficiency gains to lower overall API cost will remain important. Emerging markets are benefiting from expansion of medical infrastructures and an increase in per-capita income. A successful growing penetration of health insurance, a growing aging population and information campaigns of pharmaceutical companies prepare the way for API market growth.

Also biopharmaceutical APIs, which currently make up the smaller part of the global API market compared with chemically produced counterparts, are of interest. The growth prospects for these kinds of actives represent attractive opportunities for growth for innovator companies, as well as for biosimilar API manufacturers.