IHS Chemical Week


Neglected Tropical Disease Drugs: What are they Telling Us About Innovation?

10:38 AM MDT | March 12, 2012 | By GIRISH MALHOTRA

by Girish Malhotra, president of Epcot International (Pepper Pike, OH)

During my career I have been involved in process simplification and cost reduction of different chemistries, chemicals and processes. When I am discussing any process, my mind always races to understand its chemistry, manufacturing process and how the cost lowered and the profit improved. This blog is a follow up of an earlier blog - December 2011 Manufacturing Opportunity in Drugs for Infectious Diseases.

I am using here the example of three drugs for Neglected Tropical Diseases (NTD)/Infectious Disease; Tenofovir (Antiretroviral); Praziquantel (schistosomiasis); and Isoniazid (tuberculosis) to show what cost reduction opportunities exist. Observations of the analysis answer a question many of us have; “can new technologies be easily introduced for existing products?”

My intent is not to criticize practices or any profit making organizations, charitable foundations or governments involved in the management - or prevention – of diseases. Along with benefits of technology innovation (lower cost, higher profit, better quality) companies will have to overcome regulatory re-approval hurdles. Lower costs can extend the reach of donations to additional people or time. Donor fatigue could be lowered. I am sure all of us want to help the needy.

Methodology used to calculate price of API

In May 2011 The Wall Street Journal (2) discussed the lower cost of Tenofovir. Its chemistry intrigued me. The article also suggested how the funding could run short for the care of the needy. I have used the current selling price of the drugs to reverse calculate the selling price of the active pharmaceutical ingredients (API). The numbers are approximate. Chemistries in the public domain are used to make my observations. These chemistries or manufacturing methods are not optimum, thus suggest opportunities. If someone disagrees then I would like to discuss “the why not”. However, I see regulatory hurdles.  

Tenofovir is an antiretroviral used for AIDS. The first table below shows the price of Tenofovir  in May 2011 (1)The API selling price of $303.10/kg might not sound high or outrageous to pharmaceutical company personnel but to a family in the developing world living on $2.00-5.00/day, 23 cents per day for a tablet can be a considerable burden. It can be a matter of food for the family versus medicine for an individual (3).

Table 1:
Costs relating to the production of Tenofovir.


The Wall Street Journal article and literature suggest that the yield of the Tenofovir process has been improved from 13 to 24%. On a percentage basis this is a significant improvement. A review of the chemistry and the process suggests that the yield can be improved further and the solvent consumption reduced; the process could be made more productive and sustainable. If the yield can be improved from 24% to a much higher number such as 48%, the dollar savings for the governments and charitable foundations would be in millions of dollars. A yield of 48% would be a wonderful improvement but my question is why not 66% or 75%?

If we can lower the cost of the API through better manufacturing technologies and economies of scale to $200/kg - which I think is still high - down from $303/kg, the cost of each tablet would drop to about 15 cents/day. This would be enormous relief for the needy and huge savings for the governments and non-profit foundations.

Table 2 (below) illustrates the API need at different population levels. If only 50% of the infected population was taking Tenofovir the cost could be lowered by $100/kg. Many will say it cannot be done but I would like say let us figure out how it can be done. The savings would be about $192 million dollars/year. 

Table 2:
Demand for Tenofovir.


Praziquantel (PQZ):
Praziquantel is the preferred drug for Schistosomiasis. Analysis similar to Tenofovir suggests opportunities but there are hurdles also. I have used a price of 10 cents (5) per 600 mg for a tablet when purchased in bulk by WHO or similar organizations. If the API cost is 40% of the selling price of the tablet, the API cost of about $67.00 per kg. If we use 400 million tables (6) per year as the need, the total need for humans would be  about 240,000 kilos per year. Praziquantel is also used for animals but their dosage is low compared to humans. I estimate PQZ demand of about 300,000 – 400,000 kilos per year to cover most of the needs.

PQZ is being sold at about 20 cents/tablet in Kenya. Compared to the bulk purchase this is a significant mark-up to cover the cost of distribution and related profits. A review of the chemistry suggests that the yield and the manufacturing process can be improved. Site consolidation and manufacturing innovations could also lower the API price by 20-25%. Savings of about $5-to-$7 million/year would be expected. A single plant could produce the global API need and be very profitable.

Isoniazid is one of the drugs used for tuberculosis. Since patients can develop side effects, I have assumed only one third of the global population can use the drug (7). This pegs to about 3 million patients who will take 200 mg (adult/child average) dose for 270 days. It would require about 165,000 kg of API to serve the needs. Using API as 40% of the selling price of the medicine, the cost of API (3) would be about $40/kg. Total API revenue would be about $6.6 million/year. 

The chemistry is simple and a single plant can produce the product using a continuous process. Such a process and plant could lower the tablet cost. Since the total API revenue is not stellar, I have doubts if any one would make any effort to have an innovative process even if there were 30% saving. Since the drug is being produced by many companies no one is going to make a change in their process as re-approval as costs are an unknown and could exceed the total savings.

On a consolidated site basis there are savings for PQZ and Isoniazid. However, no one would be interested in consolidation. Cost reduction at each site due to technology improvement may not be sufficient to overcome R&D, process modification and regulatory re-approval costs. Improvements and changes at each production site would have to be evaluated on a case by case basis.

Incorporation of better technology for Tenofovir is definitely a possibility and should be explored. It is up to individual companies to decide their course. It might be necessary for charitable foundations to get involved in technology innovation.

The above observations can be extended to every existing API. The motto for any new API, it that it is best to incorporate every possible improvement in the process before any paper work is filed for regulatory approval. I expect that same will be true for formulations. All this suggests that the move from Quality by Analysis "QbA" to Quality by Design "QbD" is going to be a challenge,  especially for the existing products. 


1. Tenofovir Disoproxil Fumarate http://utw.msfaccess.org/drugs/, accessed Feb 23, 2012.
2. Researchers Manipulate Drug's Chemistry in Bid to Lower Treatment Cost, The Wall Street Journal, May 13, 2011.

3. Malhotra, Girish Drug Prices: Food vs. Medicine, A Difficult choice for Some or Many June 22, 2011.

4. www.avert.org/worldstats.html accessed February 23, 2012.

5. Private communication with Charles H. King MD, Professor of International Health Center for Global Health and Diseases, Case Western Reserve University, February 26, 2012.

6. Hotez, P etal, Africa is desperate for Praziquantel, The Lancet, Vol. 376, August 14, 2010 pg 496-498.

7. WHO Tuberculosis Facts http://www.who.int/tb/publications/2011/factsheet_tb_2011.pdf accessed Feb 28, 2012.



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