Catalyst

CW website’s ‘Quote of the Day’ today illustrates an alarming state of affairs regarding the counterfeiting of pharmaceuticals. The quote, “These guys have got some balls,” was made by a spokesman for China’s State Food and Drug Administration (SFDA) on criminals who set up a fake version of the drug watchdog’s website to promote their own ‘miracle’ drugs, so says a report by Reuters.

So now we know what industry groups such as SOCMA and the European Fine Chemicals Group, among others, are up against. As fine chemical manufacturers what are your experiences of pharmaceuticals counterfeiting and how do you think the industry should respond?

The flagship pharma manufacturing expo CPhI on Tuesday of this week opened its doors in Milan, Italy to an anticipated 22,000 attendees and 1,750 exhibitors. It’s a big beast. The mood among contract fine chemicals manufacturers exhibiting and attending the show interviewed by CW is one of confidence about prospects for growth in what executives are saying is becoming an increasingly lucrative period for the pharma outsourcing services sector.
The story revealed exclusively yesterday by CW that Pfizer is set to sell its Feucht, Germany pharma manufacturing site by year-end  is just one indication of how big pharma is steadily cutting its production base and switching to contract manufacturers in a bid to improve efficiencies and reduce costs.  As a result of this kind of information many western fine chemical firms exhibiting at this year’s CPhI say the signs are good.
Chemtura says its sales for reagents and chemical building blocks required for the production of active pharma ingredients (API) are growing at about 5-7%/year. The company says it expects that “certainly that growth ate will continue for the next few years” across North America and across Europe and that its business in Asian markets, although smaller, is increasing faster.
Many small size U.S. and European API manufacturers alike say that the prospects are good and that they are looking forward to between 5% and 10%/year sales growth, or even more. API manufacturers such as Helsinn say business is “going well.” Furthermore, concerns among western manufacturers about the threat of low cost Indian and Chinese contract manufacturers taking western companies’ market share seem to have dissipated somewhat.
Despite the apparent upbeat mood, many of the 22,000 CPhI attendees still appeared to be hot and bothered. The weather was on the warm side, queues to get most places were on the large side, the layout of the show was tricky and getting from A to B tended to be a struggle. As one exhibitor put it, on the first day “every one of our customers was 30 minute late.”
What’s your your take on CPhI?

-Alex Scott in Milan

Chemical firms across Europe and beyond are having to come to terms with Reach, the European Union’s recently introduced environmental legislation. Multinationals and small companies alike will be affected by the legislation. Here’s an uncut and candid detail from specialty chemicals firm DSM on how it is approaching Reach.

DSM’s input is from Environment Manager Jan Berends and DSM Board Member Jan Zuidam.

As a company involved in both fine and industrial chemicals, what are the main challenges you face in preparing for the registration phase of REACH next year?
First of all we are working on a complete inventory of all substances that are in our products, raw materials and intermediate. All these substances have to be ‘pre-registered’ before the end of 2008. Our suppliers have to register the substances they produce or import, DSM has to register the substances in our intermediates and our products. We also collect all information that we have about the relevant substances that is needed for the registration.
In 2007/2008 we will have to assure that all essential raw materials will be (pre-) registered. We will ask our suppliers. In case suppliers are not wiling or not able we will have to act ourselves (register, change of suppliers, etc.)
We are also aligning our risk assessments, because our suppliers need to know the use and exposure of the substances they deliver to DSM. REACH requires that this is mentioned in the registration.
Main challenge is to do this 100% for over 500 products and over 5000 - 10.000 raw materials and thousands of suppliers.

How will the new regulation affect your activities in practice? (i.e.: which sectors of your activities and/or products will be affected first or most heavily?)
On short term extra work as indicated above. The largest impact we now expect is on sourcing of raw materials. E.g. additives (even non-hazardous) might be no longer available on the EU market because the importer/producer does not want to take the burden of registration. However we have to explore this better and not speculate. It should be taken into account that the period for registration for smaller volumes lasts until 2015 of even 2018. So we have to see and act accordingly.

How do you see REACH as an impediment to DSM’s activities? Conversely, how do you see the regulation as an opportunity for your company?
In first instance there will be uncertainty which is not good for the business in EU. There might be some opportunities, however as long as the EU is different from other parts of the world you can argue whether this might really turn into a benefit. Replacing hazardous substances by less hazardous has been a drive already for many products already for a long time. Companies already have the ‘duty of care’ It remains a question what the added value of REACH will be.

Do you expect your company’s results to improve or deteriorate as a result of REACH? Why? Are you planning to relocate some of your activities?
We now do not expect big impact relative to the trend. Probably we can benefit to some extend from our bio-based orientation (less hazardous substances used and produced) and our long history of responsible care activities (e.g. product stewardship, quality of product information, etc.)

If you were to introduce changes to the regulation what would they be? What would make REACH work better in your view?
I would look for simplification of the registration dossiers depending on the type and the use of a substance. You don’t have to know ‘everything about everything’, but just what is relevant in the different uses. So a more risk based approach. This in fact is the approach as applied in the EOCD HPV-program. And rather than making it full proof in the EU I would spend some energy in global harmonization, since products are being produced and used worldwide.

–Alex Scott, Senior Associate Editor, Chemicalweek magazine

The European Union’s Registration, Evaluation, and Authorisation of Chemicals (Reach) program came into force on June 1, but the legislation remains incomplete with large chunks of crucial guidance on how the chemical industry can implement Reach still missing, industry sources say. Iuclid 5, the European Commission’s long-promised online database that will enable direct uploading of Reach data via the internet, has also not yet been launched. “Frankly, it’s impossible to have everything in place because the commission doesn’t have everything in place,” says David Buckland, head of corporate regulatory affairs at Akzo Nobel. “As well as the absence of Iuclid 5, there are very few of the technical guidance documents available that are going to tell us how to apply Reach,” Buckland says. The commission has indicated that some of the less urgent guidance documents will not be available until November. “They are running behind by several months, that is absolutely clear,” he says. “We feel we have [done] everything we can without the full package from the commission.” Akzo says it has been preparing for Reach for five years and that much of its efforts so far have been geared toward identifying the group’s product portfolio for the purposes of Reach. Akzo estimates that its direct costs from Reach, including registration fees for its products, will total about €100 million ($135 million). BASF, meanwhile, has unveiled a new service, dubbed Success, available to chemical importers and manufacturers, that includes support for all aspects of Reach pre-registration, registration, and approval.” We have bundled our expertise in the field of product safety into customized services,” says Ernst Schwanhold, head of BASF’s center for environment, safety and energy.