By David Wallace 28 Sep 2020
Sandoz sees key opportunities ahead in both the US and Canadian biosimilars markets, the firm’s US vice-president for marketing, market...
The first half of 2020 has been defined by the outbreak of COVID-19. And with the coronavirus pandemic likely to continue to cast a long shadow, uncertainties within the off-patent industry and medicines sector as a whole persist.
Accord Healthcare has been among those firms at the heart of European efforts to fight the pandemic through concerted generics industry activities. In an exclusive two-part interview with Generics Bulletin, the firm’s executive vice-president for Europe, the Middle East and North Africa, James Burt, details the ways in which the industry came together and acted quickly in the early days of the pandemic to mitigate its effects – as well as setting out a vision for a future that will inevitably see COVID-19 influence procurement practices as well preparations for future health crises.
Asked about the major impacts so far of the pandemic, Burt said that the unpredictability of coronavirus posed difficulties, particularly in the early stages.
“For the industry, it’s been dealing with the surprises that COVID threw up,” he explained. “In the very early phase it was difficult to try and understand what sort of demands were going to come through,” he said, adding that he was “very proud of Accord for working with our partners at Medicines for Europe,” the European off-patent industry association.
“We started to look at clinical practice in treating COVID and work out epidemiological models to get ahead of the medical demand from healthcare systems,” Burt elaborated, “and work out what the implications of those treatment protocols were going to be.”
This, he said, “was a great example of how the industry has been proactive. We worked out pretty early on what the critical product list was.”
“A colleague in our scientific affairs department was actually one of the editors of a widely used resource across the UK National Health Service detailing the administration of injectable medicines – including those commonly employed to induce and maintain mechanical ventilation – so when it came to understanding what was going on in intensive care units, we had a very detailed knowledge of the realities in hospitals.”
“We also talked to a lot of different clinicians and professors of associated disciplines,” Burt noted. “So we built up pretty quickly a clear list of where the biggest demand was going to be seen. And then, with other members of the team, created an epidemiological model to help predict demand.”
This model allowed the generics industry to lead the way in modelling demand in unprecedented circumstances, he observed.
The model was communicated “both within the industry but also to the health systems,” Burt recalled, “and it was pretty clear that individual countries were far less aware of what their own need was actually going to be.”
“I’ll give you an example: one country in particular just multiplied its normal demand by three,” Burt highlighted. But “when we looked at it in a more scientific way, in some molecules we anticipated up to a 20-fold increase and other molecules less so. But without that understanding of what the demand was, we wouldn’t have been able to paint a more accurate picture and then devise a way to address it.
In such unprecedented circumstances, comparable past situations were hard to come by. “What we did do was to look at a lot of early publications on R-rates and incidence around Europe,” Burt described.
Later in, towards the end of June, he said, “we looked back at predictions made in early April and we were within a couple of percent of what actually happened. It was remarkably accurate. At a pan-EU level I think our epidemiological model was about 95% accurate.”
Burt also noted that this model had taken a “slightly different approach to some of the more well-publicized academic epidemiological departments, as we looked at the change in death rate and then extrapolated this to anticipate ICU medicines demand from there.”
“This proved to be more accurate,” he explained, “as testing wasn’t universal so the incidence wasn’t very clear – many people would have it but not get tested for various reasons. What was a lot more accurate were the mortality statistics, hence we used these as one of the principal things to anchor the modelling.”
“This kicked off in March,” Burt detailed. “We had done our own internal studies, and certainly in March we had worked out the five principal groups of products that ICUs were seeing the big spikes in demand in.”
“We then broke that down and looked at – if there was an outage in this agent, what would be your next line and then your next line. And from that we got a cascade of demand. We then shared that through Medicines for Europe and they worked it through with the industry to put it into the supply side.”
Asked whether this modelling was widely accepted and whether the process of getting all the necessary parties on board was relatively frictionless, Burt acknowledged that “there was a degree of apprehension. Not only were we trying to do something that had never been attempted before but we were doing it in a very challenging environment, where time was very much of the essence.”
“There were a number of calls with science leads from different companies,” Burt noted, “where there was healthy debate about the [drug] selection and sequencing, before it all got locked in.” Ultimately, however, “in terms of collaboration, everyone came together with a common purpose and I am really proud that Accord was one of the instigators of this approach.”
“What was particularly unprecedented,” Burt said, “was that the European Commission engaged in a very meaningful way to give us guidance on EU competition law in the form of a Commission comfort letter to the industry.” (Also see "EU Rips Up Competition Rulebook To Allow Collaboration On Coronavirus" - Generics Bulletin, 8 Apr, 2020.)
“This really helped to facilitate a degree of co-operation in the ICU Medicines project, giving participants a high degree of clarity,” Burt recalled. “We maintained full transparency to the Commission on all of the work, meetings and decisions of the project as part of that guidance and the Commission deserves credit for engaging in this way.”
A key aspect of the transparency around and control of this collaboration was to engage an independent third party to “act as the nucleus of the project,” Burt explained.
“Medicines for Europe appointed the consultancy AT Kearney for this role and we pioneered the ‘clearing house’ concept, to ensure individual company data was held arms-length from the participating companies. Only the aggregated anonymized data was then fed into the epidemiological model, which incorporated the protocol sequencing, to allow the group to compare the predicted demand to the aggregate supply that the different companies could offer.”
“That then gave us a bit of an alert mechanism to be able to say: here is where the biggest strains and stresses are, on these types of products. I thought it was a very elegant solution to deal with competition-appropriate limitations, but at the same time get a full industry view.”
And the collaboration went beyond just Medicines for Europe members, Burt said. The association’s director general Adrian van den Hoven and his team “reached out to the whole sector, including some of the brand players,” Burt noted. “So we ended up with quite a big caucus, and that really did start to give early indications as to where the challenges in supply were going to be.”
Asked whether there were tough decisions to be made in terms of tailoring production to forecasts – such as the trade-off between manufacturing urgently-needed medicines for COVID-19 patients and continuing to serve those with chronic conditions – and whether it was difficult to find that balance, Burt said “it was and it wasn’t”.
“I think this is an unsung story,” he emphasized, “but we literally re-pivoted production to prioritize any of these agents that we could make that were a priority for ICUs. So we actually acted on the moral rather than commercial imperative – we basically diverted staff to the lines that made ICU medicines.”
“We were obviously experiencing some challenges on workforce, because of lockdown measures,” Burt observed. “So there were some pressures, and there remain some pressures quite frankly, on factory output. But we directed as much as possible towards the ones the ICUs needed.”
Asked about how this modelling has evolved to address the changing patterns of the pandemic, Burt explained that “Medicines for Europe are maintaining the demand data and at the last look things seemed fairly stable for ICU medicines within Europe. The good thing for everyone is that, in the event of a significant change in the trajectory of the pandemic, the approach has been established to quickly re-assess the detailed understanding of the supply picture.”
“We continue to track changes to the pandemic epidemiology as well as treatment protocols and the approach certainly looks like it helped avert potentially catastrophic medicines shortages in the first wave.”
“That said,” Burt acknowledged, “it got pretty tight – there were days when we knew that countries were within a couple of days of going out of stock on key items, so as an industry it felt pretty challenging.”
“We continue to plan for potential second waves and are in process of rebuilding inventories that were depleted earlier in the pandemic,” Burt outlined. “The European Commission and many national health systems are also moving to secure more resilience in the area by initiating exceptional procurement and tendering for ICU medicines.”
“It’s always difficult because different countries have different views on how much to stockpile, so we try and help to guide where things seem a bit unusual,” Burt indicated.
Questioned on whether individual nations had sometimes behaved in ways that were counter-productive – such as through export bans or other national measures – Burt said “there were a number of state-led initiatives that were detrimental in my opinion, where they were looking to secure active pharmaceutical ingredient stocks and in some cases bring them into non-good manufacturing practice approved sites for conversion.”
“I understand that governments were trying to do everything they could, but in some cases it actually led to inefficiency,” he lamented. “Outputs in that non-GMP setting are going to be far lower. For me, the best way to get increased demand is to work with the industry that has the facilities that can convert those quantities most efficiently and under proper quality controls.”
“So there were definite examples both of state-backed stockpiling of API to push into non-approved facilities domestically, as well as some of the export bans or restrictions in certain areas.”
Several months on from the early days of the pandemic in Europe, things now look quite different, with many European nations having gone through a number of different mitigation measures – including lockdowns – that have affected the off-patent industry both directly and indirectly. Burt explained how the industry had been proactive in addressing these difficulties.
“I remember driving to work early one morning in February and realising that our main distribution hub in Milan was in a ‘red zone’ and effectively staff couldn’t go into the warehouse and so goods couldn’t be shipped,” he said. “So we worked pretty quickly with Medicines for Europe to get ‘green lanes’ as a concept understood by European governments.”
“That was the idea that essentially pharmaceutical logistics traffic, and other key traffic, could jump the queues,” he explained. “We came up with a device where pharmaceutical goods were identified and allowed expedited transit.” (Also see "‘Green Lanes’ Will Help EU Fight Coronavirus" - Generics Bulletin, 18 Mar, 2020.)
Asked whether this recognition of the industry’s needs was a turning point that suggested that the off-patent industry was leading the way on these matters, Burt said “I think that’s a fair assessment.”
“We appreciate that governments listened,” he commented. “What was also quite forward thinking was that we took those learnings and communicated them to other regions, to try and help them get ahead of the curve. It took a while to react to those learnings but on the whole it was successful.”
As an example, he offered, “we liaised with Indian authorities and stakeholders via dialogue between Medicines for Europe and the Indian Pharmaceutical Association on lessons learned, covering a number of the items, such as ‘green lanes’.”
“Another challenge we had was with the shipping of goods,” Burt noted. “As you might expect, we ship a lot of goods – the majority of the goods we sell in Europe are made in Europe by volume, but oncology drugs and ICU drugs would be made in other sites. And when you airship, a large proportion of that airship actually goes in the belly of passenger jets, so a big challenge was that when all the passenger plane volumes dropped, access to air shipment just fell away.” (Also see "Reduction In Flights Hits Global Supply Chain" - Generics Bulletin, 23 Mar, 2020.)
“Basically it led to a complete impossibility to airship for a while,” he described. “We even talked to various nations about arranging emergency government planes.”
And when the situation did ultimately unwind, he said, “it meant that the cost base was unprecedented – we saw a four to five-times increase in air shipping costs. And that’s when it was possible. For a good two or three weeks, there was no ability to exit the country in many cases, European countries shut down airports, there was that drop in numbers and in some cases complete banning of air travel in April.”
Asked whether possibilities were explored of using other aircraft to ship medicines, Burt said that “in the end we managed to find commercial freight partners – there were discussions with a number of governments concerning emergency military flights as a contingency plan, but we eventually managed to work with the freight forwarders to find access to the limited number of cargo flights, and actually got some special ones put on, so that was quite a breakthrough particularly for us.”
“We managed to get some additional freight capacity put in in April,” he noted. “But even to this day the prices are very different to what they were pre-COVID.”
Looking ahead to the medium term, in view of how sustainable the current situation is and whether any major disruptions are on the horizon, Burt said that “at current rates, things are pretty stable, but if there was a massive second wave it could put extra strain. We are doing our best to obviate that ahead of it happening, but there is a limit.”
With many firms seeing spikes in demand early this year – ahead of anticipated troughs that are expected to balance this out later in the year (Also see "Generics Industry Experiences Extraordinary First Quarter Due To COVID-19 Crisis" - Generics Bulletin, 7 Jul, 2020.) – Burt concurred that “I’m getting the weekly IQVIA reports and it’s very volatile on the purchasing side.”
“It does vary a bit by therapeutic area, but on the whole we’re seeing medicines demand in April-May down by 15%-20% compared to normal levels,” he said, “and that is common in other geographies as well, looking at our US, Latin America and Asia-Pacific demand.”
“Around the world you’ve seen this drop-off in prescription,” he described. “And it’s linked to patients being hesitant to seek treatment, as well as the impact on deployment of treatment.”
“It’s also different by country,” he noted. “You can see certain countries that are further out of lockdown restrictions at a more normal level of demand.”
“We did also definitely see buying-up in March, attempts to secure supply. That then led to utilization of those inventories in April-May, and then you’re seeing this decline in prescribing in those months, so seeing the figures for July is going to be very interesting in how it pans out. I’m seeing July as a bit of a bellwether month.”
Questioned on whether differences in individual national situations would make future modelling and forecasting increasingly complex, Burt agreed that “it’s a very multi-faceted problem, and one size doesn’t fit all. What we did do with the epidemiological modelling is pay attention to the different national lockdown restrictions and make projections from that, and that is something we will carry on doing. And it was a model that we adapted every day as new data came in.”
“But I liked that we had a locked-down version in early April, and by June the accuracy was within a few percent, so that was pretty heartening.”
However, Burt warned that there were still significant pressures on off-patent companies that would make the coming months tough for the industry.
“Clearly there is economic strain across every sector of the economy,” Burt acknowledged, “and there’s this assumption that pharma is fine because it’s in healthcare and COVID ultimately has a healthcare response.”
“I think people have to understand that pharma isn’t immune to the economic challenges that COVID has presented,” he said. “Ultimately, underlying volumes are down, without a doubt, and that’s going to carry on to a degree for the immediate future. And that has created financial pressures within companies.”
Asked whether industry’s decision to follow the moral imperative and meet the needs of patients rather than follow profit played a part in these pressures, Burt said “that exacerbates it, without a doubt. We are servicing the need. It’s part of the story of generics – you are getting lifesaving medicines, a month’s supply say, for less than the price of a cup of coffee.”
And questioned over whether the generics industry had shown additional potential in recent months – especially in the light of discoveries such as the effectiveness of dexamethasone in treating COVID-19 patients (Also see "Dexamethasone Shows Potential Of Repurposed Generics Against COVID-19" - Generics Bulletin, 18 Jun, 2020.) – he said that looking to such solutions had been a central part of Accord’s approach from the early days of the pandemic.
“One thing I did very early on, and I’m very proud of it, is that we pulled together a clinical team and started a science review,” Burt said. “So we’ve reviewed every single paper that’s come out about COVID, we’ve built a full pathology of the viral lifecycle and immune response, and as different experimental medicines get into trial, we’re keeping an eye on that, to make sure that – should there be a need – we can prioritize other medicines.”
The decision some months back to support hydroxychloroquine trials “came out of our early literature scans,” Burt noted. “And that goes on – there’s a whole number of agents we’re working with clinical groups on now.”
On hydroxychloroquine, Burt noted, “we developed a new API source, when it became clear that Europe had only got one API source, and we worked with an API developer and that is now running through. Material from that will hit the market in the autumn. So should there be a trial output showing benefit, we will have created a new resilience that just wasn’t there before.”
“Could there be other repurposed medicines that have relevance in the treatment setting? That will take a few months, but we want to make sure that if there is a likely candidate, we have secured the supply.”
In the second part of this interview, James Burt talks to Generics Bulletin about how the COVID-19 pandemic will transform the future outlook for the industry, including on procurement and future pandemic preparations. (Also see "Procurement Must Look Beyond Price To Ensure Supply Chain Security" - Generics Bulletin, 31 Jul, 2020.)
28 Sep 2020
Sun Pharma and Bausch have decided to settle litigation over rifaximin, granting the generics company a non-exclusive license effective 1...
Whether you’re a small biotech start-up, research firm, generic manufacturer or a global pharmaceutical giant, you need focused, independent insight and opinion on market developments.
Our team is always happy to hear from you. Please call us at:
Have an immediate and specific information need?
Browse and buy from 1000s of analysis and research reports now: