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Keeping the flies out of the ointment. What else the NHS Supplier or Manufacturer needs to think about Stephen Langford Pharmacy Production Director Calderdale & Huddersfield NHS Foundation Trust. This presentation covers. The costs of small volume niche manufacturing
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Keeping the flies out of the ointment What else the NHS Supplier or Manufacturer needs to think about Stephen Langford Pharmacy Production Director Calderdale & Huddersfield NHS Foundation Trust
This presentation covers • The costs of small volume niche manufacturing • On-going investment in manufacturing facilities • Breakdown of systems costs • API supplies • Product development • Background • Issues • Resilience and reliability • Resilience through collaboration • Case studies • Key messages • Collaboration to NHS benefit?
The costs of small volume niche manufacturing • Historically most NHS PMUs have and still operate at the margin of profitability; if at all. • Now being asked to operate as self financing units; • Covering operating costs • Return investment costs to the host Trust through SLR. • Cover future investment requirements. • Deliver high service level (delivery in full on time DIFOT) • Meet full regulatory GMP expectations • Development costs for new products • This is presenting several challenges
On-going Investment in manufacturing facilities • In 2003/4 the NHS invested £46 millions in the NHS PMU network. This does not include commissioning costs and subsequent project corrections (£60 million is a realistic investment cost over 10 years). • A new –build regional level PMU involves an investment of £10 to £20million • As a consequence: • A regional level PMU with 50 staff providing sterile & non-sterile manufacturing (without internal aseptic dispensing operation) requires a turnover in the region of £4 million + p.a. for financial viability against a transparent trading account and to generate sufficient funds for future investment. • An ongoing annual investment of £ 100,000 - 200,000 is required to maintain and update equipment/plant systems
Breakdown of systems costs • Sterilizers; WFI Stills; gassing isolators weigh in at £150,000 each. • Most “small “ manufacturing systems (bench top ampoule fillers; bottle washers) at £50,000 • Filling and capping equipment between £5,000 to £20,000. • Business Management System - £15,000 p.a. • An industrial scale system e.g. ointments/IV bag filling system approx £250,000 • Annual maintenance costs are in the region of £3- 400,000.
Active Pharmaceutical Ingredients (Raw materials) • International supply chain with major quality issues. • Minimum of six months to arrive e.g. noradrenaline; dithranol; adrenaline; cocaine hydrochloride. • NHS QC staff are putting in massive efforts to source, validate and test API supplies but do not have the resources to visit plants in India & China. • European sources (if available) considerably more expensive e.g. dithranol 60p per g c.f. £3.50 per g • Considerable outlay in up front costs: • Noradrenaline acid tartrate £20,000 per Kg • Alfentanil £26,000 per Kg • Adrenaline acid tartrate £35,000 per Kg • Crude coal tar £55 per litre
Product development - background • Stability data – only some large PMUs have the resources to fund (minimum start up cost £5,000) competent studies and there is still a large legacy of inadequate or minimal data. • Information & Data has value – intellectual property • Stability of some products will have to be based historic custom & practice e.g. coal tar preparations. The value of the “business” is never going to generate the required funds. • Stability has to be assessed in real time. • For the batch manufacture and distribution there is no point in producing a product with less than a 6 month shelf life.
Product development –the issues • All product development is done at risk and costs incurred by PMUs. • No commitment to purchase products even when specified in Tenders e.g. • Alfentanil 25mg in 50ml vials • Oxycodone 10mg in 50ml vials • Even when tenders are won; refusal to purchase at the tender price; • Fentanyl 50micrograms in 50ml vials • Inclusion of single user and “wish list” products. • Aseptic service tenders have seen the proliferation of “89 day” products to evade end product testing. • Unreal expectations of development timelines.
Resilience and Reliability • Out of a total 1500 NHS product lines; 376 sterile product lines from single source PMU of which over 100 are clinically critical • Above includes 108 ophthalmic preparations. • Resilience works at several levels; • Are there backup plant systems e.g. compressors and sterilizers? • Early warning systems of impending trouble. • Have critical products & processes been identified and contingencies put in place? • Robust stock control & demand management requires co-operation from customers (including clinical specialists) • Over-production – allow for wastage in product pricing • Alternative suppliers for APIs
Resilience through collaboration • Not straight forward; • Need to retain customer base in competitive market. • Redirecting customers – inconvenient for all concerned • Buy in stocks for onward distribution – requires Wholesale Dealers Licence. • Set up potential alternative manufacturer requires; • When to activate – manufacturing from scratch requires some weeks lead in (especially sterile products). • Batch Manufacturing Records • API available (or transferred from source PMU) • Slot into existing production plan. • Agreed equivalent specifications; presentations, labelling given different plant & equipment systems.
Case study 1 • Failure of double batch of Cardioplegia solution. Out of Specification breakdown product levels due to alterations in pH. Clinically not important. – but customers refused product and cancelled theatre sessions instead. • Unique API (Procaine hydrochloride – no other NHS special uses it) • Total NATIONAL demand each of A & B is 2000 units p.a. • Multiple site manufacture untenable; the product has to generate a worthwhile return. • Financial return on product OK but not spectacular • Now over-producing to guarantee 100% availability & price increase.
Case study 2 • Noradrenaline injection • Intervention following withdrawal at no notice of major PFS supplier • Intervention with support from the CMU. • Approach to manufacture terminally sterilized bulk solution to support PFS. • Supply situation with API . • Lesson – no visibility of pre-existing stocks • Industry has picked up – six months later. • Note bulk terminally sterilized solutions add safety to aseptic processes & cost effective. • Now supplying both NHS & Private provider
Case study 3 • Povidone iodine ophthalmic solution • Approached by major NHS user; • Existing products very expensive • Supply issues due to complex aseptic manufacturing method. • Less than ideal presentation for theatre use. • Agreed that only a terminally sterilized product could be manufactured in “volume “ to address supply & cost issues. • Ideal formulation: • Povidone iodine in BSS + Heat = No iodine. • Reformulate
Case study 3 cont. • Sterilizable screw cap container system of appropriate volume – two pilot batch integrity testing failures before getting right container/closure combination. • Real time stability study • Six months in development + stability testing. • Negotiated price with customer considering their budgetary limitations • While this is a considerable success – development costs were carried by the PMU.
Key messages • Unlicensed medicine manufacturing is diverse and complex supplying a niche market. • Sterile manufacturing facilities are particularly expensive to build, maintain and operate. • While there is abundant non-sterile NHS & non-NHS capacity; non-NHS specials supply to primary care has opaque manufacturing and trading practices. • Private sector prices are 150% to 1000% more expensive than equivalent NHS PMU products. • However NHS prices have been historically underpriced and from the above cannot continue given that PMUs must now prove financial viability.
Collaboration to NHS benefit? • NHS Pharmacy Procurement and Clinical Specialists need to engage with PMUs – they are part of the NHS. • Suppliers of last resort: • Oseltamivir oral solution • 4 interventions by Huds PMU alone over last two years in response to critical product supply issues. • Active participation in product rationalisation and development by PMUs; Ophthalmic & ULM Working parties (Paediatrics; TB Medicines & Dermatology products) – support of QUIPP. • Collaborations with Industry are happening – but you need to know who you are dealing with and what is really on offer. • Inappropriate tendering will be destabilising; the uncontrolled exit of further NHS manufacturing capacity as a result of tendering will have consequences for patient care.