This coverage is sponsored by: Catalent Pharma Solutions
Even though the vast majority of the companies at CPhI this week are from outside the U.S., the impending election there is on the minds of many of them. After all, the U.S. is the world’s largest market and the heated political focus on drug pricing can’t be missed. It has interjected uncertainty in the market and is delaying investment decisions.
“The U.S. election is playing a big role because it may have a big effect down the road,” Ramesh Subramanian, VP of strategic marketing at India’s Piramal, said today as CPhI wound down on a rainy day in Barcelona, Spain. “On Nov. 8 we will know the result and by January hopefully will have some clear policies and the uncertainty will go away.”
Subramanian said the company has particularly seen decision delays in biotech, an area that Piramal is focused heavily on these days because of its upside and the company’s work in oncology.
Piramal's capabilities in this regard were heightened recently when it agreed to pay up to $52.95 million for Ash Stevens, a Detroit-area CDMO known for its work with high potency anti-cancer agents and other highly potent therapeutics.
It also wanted another U.S. site. All of the attention on FDA concerns over Indian manufacturing plants have led some customers to prefer to complete products in the U.S., despite the quality track record of their own provider.
Subramanian said Piramal, which he says has an exemplary record, actually ran some data on all of the FDA actions and discovered something of great interest to the Indian CMO market. Pure play Indian CMOs have not had any issues, he said. He thinks that is because their facilities get visited so often by customers who want to check on the operations themselves.
“We have had 97 inspections in the last few years and only a third of those were from regulators. “People watch us,” he said referring to the CMOs.
The potential fallout from politics is not confined to the U.S. There is also the U.K.’s recent decision to leave the European Union.
Kevin Cook, CEO of the newly formed U.K. CDMO Sterling Pharma Solutions, mulled the possible impact of Brexit on the industry, as crowds at CPhI were thinning. Sterling was formed from a management buyout last month of the site in Dudley from India’s Strides Shasun.
Cook, a two-decade veteran of the facility, said he figures it will take a couple of years for the U.K. and Europe to work out how regulations and trade deals will work. Since he can’t control it, he doesn’t worry about it. “You focus on what you can control.”
He feels pretty much the same way about the U.S. election, although he understands that pharma clients are watching it closely.
When it comes to the U.S., he says Sterling would like to get its hands on a U.S. facility, but for now it is focused on building up the capabilities of its site in the U.K. While he is well aware of the consolidation in the industry that has led to some quite large competitors, he can extol the virtues of being a single-site operator. He says there are advantages to having all of the work done in one location where the teams that start with a product can see it through to completion.
Cook said meetings at CPhI have left him feeling there is a lot of opportunity for Western companies as Big Pharma looks more often to them than to Asia for services. That is not to say there won’t be challenges, but he figures there always are.
“In my 25 years, I have come to realize there is always something that will come along, but you face it and get on with your business,” he said.