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Securing The Bulk Of The Drug Supply Chain

U.S. and European excipient manufacturers are converging on a safety regime that regulators may adopt

by Rick Mullin
April 22, 2013 | A version of this story appeared in Volume 91, Issue 16

Credit: Shutterstock
Pharmaceuticals account for just about 10% of the total market for chemicals used as excipients.
A pill bottle with large red pills spilling out of it.
Credit: Shutterstock
Pharmaceuticals account for just about 10% of the total market for chemicals used as excipients.

The pharmaceutical supply chain has received intense scrutiny in recent years, after a spate of lethal drug contamination cases, including deaths in the U.S. resulting from contaminated heparin. In response, the Food & Drug Administration and its regulatory counterparts worked with drug companies to establish comprehensive inspection of production sites for active pharmaceutical ingredients (APIs).

Another deadly case of drug contamination—the replacement of glycerin with ethylene glycol in cough syrup distributed in Panama—pointed to a second, much broader, and still largely unregulated link in the supply chain.

Glycerin is an example of an excipient, a nonactive ingredient used to formulate a finished-dosage pharmaceutical. Regulators are now looking to police excipients in much the same way they do APIs. Excipient suppliers generally welcome the scrutiny, but some fear that too many rules could cause the ranks of high-quality suppliers to thin. And different approaches by industry organizations in the U.S. and Europe threaten to complicate the effort.

Excipients make up as much as 90% of the physical properties of a pill, liquid, or injectable drug. The same chemicals are also used in much larger quantities in nonpharmaceutical applications such as foods and cosmetics. Indeed, sources estimate that drugs typically account for less than 10% of the worldwide market for these products.

The current Good Manufacturing Practices (cGMP) for APIs do not cover excipients; thus, excipient manufacturers are not subject to the rigorous regulatory inspections that API producers face. But they may soon be. The European Union’s Falsified Medicines Directive, passed in 2011, and the U.S. Prescription Drug User Fee Act, in its 2012 reauthorization, both make explicit what had been only implied in the past.

Previous regulations stated that drugmakers are responsible for quality control on all materials in drug products, but the new legislation explicitly specifies that excipients must be treated in the same way as APIs. Drugmakers will now have to know where all materials were produced, and their suppliers will have to be audited to ascertain that they are operating at an acceptable level of quality control.

Meanwhile, the American National Standards Institute (ANSI) has drafted a cGMP guideline for excipients based on an established industry standard that may soon be adopted by FDA.

Excipient producers that are dedicated to the drug industry applaud the increased attention. Some view it as a bulwark against competition from cheap materials entering the market, especially from China. Others are concerned that the new auditing requirements will have the opposite effect by causing companies that mostly serve nonpharma customers to abandon the drug market, thus opening the door to low-cost and maybe low-quality excipients.

The industry’s efforts to establish cGMP standards for excipients, and a corresponding means of auditing suppliers, have taken separate paths in the U.S. and Europe. Excipact, an association of excipient producers and drug companies launched in Europe in 2011, is hoping that the inauguration of a U.S. affiliate later this month will effectively harmonize its standards and auditing practices with a longer-standing auditing effort in the U.S.

Excipient manufacturers have struggled for years to get regulators, drug companies, and chemical suppliers on the same page regarding cGMP standards and auditing requirements, according to Iain Moore, head of global quality assurance at England-based Croda. Moore also heads the certification committee of the European division of the International Pharmaceutical Excipients Council (IPEC), a 20-year-old association that was formed to address drug safety concerns.

IPEC has been the de facto arbiter of quality in the excipient sector, Moore says. The group developed its own cGMP standard in 2000. But it exists as a voluntary standard because it was drafted by industry. The cGMP guideline for APIs was drafted by regulatory authorities and thus is mandatory.

The diverse range of materials that are used as excipients and the variety of markets served by companies that produce them make standard setting much harder for the excipient sector than for APIs, Moore says. Croda, for example, manufactures oleochemicals used in both pharmaceuticals and personal care products. Drugs represent less than 1% of the market for some chemicals sold as excipients. Submitting the sector to the kind of customer and regulatory auditing that API producers face, he says, would be incredibly onerous.

“For a company like Croda, instead of doing one or two audits a month, we would be doing 10 to 20. That’s clearly impossible,” Moore says. And audits are already backing up across the industry, he adds. “Some manufacturers now have sites where customers come by and want to audit, and they’re told, ‘Okay, in November.’ The customer replies, ‘We can’t wait six months,’ and they’re told, ‘Oh, you don’t understand. We mean November 2014!’ ”

Moore notes that Excipact was launched with the express goal of developing third-party certification of excipient manufacturers, suppliers, and distributors. The group’s approach is to approve auditors who will certify that a manufacturer has a suitable quality system in place and is following it. Excipact is basing certification on companies having ISO 9000 quality certification and meeting a cGMP annex to the International Organization for Standardization (ISO) standard that it has developed.

So far, Excipact has approved two auditing firms, Switzerland’s SGS and Germany’s Blue Inspection Body, to certify producers. It has presented the program to regulators and trade groups in Latin America and Asia and will launch its U.S. chapter at ExcipientFest, an annual conference and exhibition to be held in Baltimore next week.

In the U.S., however, IPEC’s cGMP guidelines are on the verge of receiving an ANSI endorsement, which could elevate them to an FDA-enforceable standard. Dale Carter, global quality director for the excipient manufacturer J.M. Huber, is among the executives who note that the proliferation of standards bodies could magnify confusion about certifying excipient quality.

“What is the manufacturing standard you audit against, Excipact or ANSI?” Car­ter asks. “And if you are operating a big petroleum site and a customer isn’t even buying directly—if they are taking gallons when you ship railcars—you might drop the pharmaceutical line.” This could lead to shortages of key excipients or worse: “The downside is that business may go to less reputable suppliers that are harder to audit,” he says.

Irwin Silverstein, chief operating officer of International Pharmaceutical Excipients Auditing (IPEA), a U.S. offshoot of IPEC that has established an auditing regime for excipients, acknowledges the confusion and risk surrounding audits. He says IPEA intends to work closely with Excipact on implementing a harmonized auditing scheme.

But the two groups have distinctly different approaches, he says. Whereas Excipact auditors base certification on compliance with ISO 9000 and its cGMP annex, IPEA has put in place a team of independent auditors, mostly former chemical industry quality managers, to conduct more thorough cGMP audits.

At least one excipient producer says it’s ready for an API-like auditing regime. Illinois-based Pfanstiehl manufactures excipients, mostly sugars, under the same cGMP standards that it applies to the APIs it makes, says Eduardo Mar, the firm’s R&D director. About 70% of the company’s products for the pharmaceutical market are excipients, including sugars used in parenteral therapies. “Endotoxins are a critical issue,” Mar says.

He applauds the push toward auditing all excipients, noting it has emerged despite little change on the regulatory front. “It has been company culture and risk assessment driving people to buy higher-value products, either cGMP-compliant or having the same quality characteristics,” Mar says.

Silverstein agrees, adding that a manageable auditing system for excipients is within reach. “It’s my contention that this could be handled well enough by industry with appropriate oversight from FDA,” he says. IPEA has invited FDA to verify that the IPEA certification board is auditing appropriately. He notes that IPEA is training Excipact’s auditors.

As for the likelihood that the U.S. and European auditing models will compete, “I would hate to think that that’s the case,” Silverstein says. “There is too much business out there to consider ourselves competitors.”


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