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FDA oversight driving closures of CMOs; Interphex speaker

By Nick Taylor , 09-May-2012

Increased oversight by the FDA is causing some US-based CMOs to shut down, a speaker at Interphex said.

A compliance clampdown by the US Food and Drug Administration (FDA) has snared several contract manufacturing organisations (CMOs), such as Lonza, in the past year. Additional costs and disruptions from the closer oversight is likely to drive up compliance costs and is causing some CMOs to close.

We’ve seen attrition in the US CMO market because of pressures from the FDA”, Glenn Alto, CEO of Pharmalucence, said at Interphex. Alto cited the example of a Massachusetts-based CMO that chose to close its doors in the face of inspection pressures from the FDA.

The anecdote tallies with a report published by ICRA, an Indian credit rating agency, in March. After talking to generics manufacturers ICRA found many are increasing investment in quality control and regulatory compliance to avoid becoming the latest company facing FDA enforcement actions.

For some CMOs and generics firms the investment needed to meet the new standard may be too great, leading to closures and consolidation. Hospira CEO Michael Ball has said he expects this to occur in the sterile injectables sector and similar market dynamics could hit the CMO market.

Preventive steps

Pharmalucence is aware of the impacts of FDA enforcement actions from its 2008 warning letter and made avoiding similar setbacks a central consideration in the design of its new manufacturing facility.

After planning to use RABS (restricted access barrier system) at the new plant Pharmalucence settled on an isolator system. A belief that the isolator fits with current and future regulatory thinking was a factor in opting for the system.

The new facility will replace the Bedford, Massachusetts plant cited in the 2008 warning letter and allow Pharmalucence to expand its contract manufacturing business. Pharmalucence is aiming for double-digit growth over the next decade.

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