Welcome once again to my occasional Blog series which centres on Extractables and Leachable (E&L) issues.
Today’s topic is one that I have not previously written about, but it was recently brought to my attention. It concerns a fundamental topic and that is the business model for E&L analysis. I have touched on this but never directly addressed it.
When I first started in this area in the middle 1990s (Yes I am that old).
The analysis of extractables and leachables was nearly always wholly completed in the analytical laboratories of the pharmaceutical companies. That contrasts with the position today where the opposite is true. That is the majority of activity is conducted as an outsourced activity within contract research organizations (CROs). However, this is not the topic I want to directly discuss.
What seems to be happening is that some CROs have stopped offering E&L as a service (with the subsequent loss of key talent and experience), due to their presumed inability to cover their costs. Whilst others are so busy that their wait times to start new projects is several months away.
This turn of events is troubling, as with every economic model one part of a healthy situation is absence of a monopoly and a unhindered matching of supply and demand.
Monopolies are generally considered undesirable, they can hurt because they lead to inefficiencies, a lack of innovation, and higher prices. Their maybe some advantages but these are typically focussed on the business conducting the activities rather than the benefit to the consumer. i.e. the pharmaceutical company.
Specifically, for this activity a lack of choice could see future developments in quality and innovation curtailed and delays in new medicines.
So, let’s turn quickly to why this might be happening. I think this is actually the most interesting aspect.
E&L activity is continuing to expand, demand is rising. But costs are increasing, the required supply available is dropping, and there is an increasing cost of doing business. Historically, you could set up a laboratory to study E&L with a single quad Mass Spectrometer and corresponding GC and LC front ends relatively cheaply and if this was already part of a pharmaceuticals analytical laboratory then the costs were hidden and reduced further. A key component has always been high-quality staff to conduct the studies.
Fast-forward to 2024, pharma has downsized and downgraded its analytical capabilities several times. The analytical laboratories only support “core activities”. CROs are now expected to do the heavy lifting and have access to a full suite of analytical and specialized equipment with the ability to detect, identify and quantify at lower and lower limits, and to do all this whilst maintaining an expert staff and the highest levels of data integrity and overall quality oversight. Regulators (quite rightly) continue to demand state of the art levels of insight into leachable exposure to patients.
What we see now you could argue is a maturing of a marketplace. The requirements are becoming clearer but does the business model make sense? The cost of setup of an E&L laboratory is the highest it has ever been, but I don’t think the pharmaceutical industry is really aware of just how inefficient the current model is, with each company independently commissioning studies which may have been done many times before by others.
I have spoken before about the advantages of shared approaches and this “thinning of the herd” in the reduction of CRO offering E&L is perhaps the free-market correction which was always going to happen.
If resources become rarer and more expensive, will pharma continue to operate the same business model?
E&L testing is not a simple commodity, reducing it to one has risks. I fear a simple free market approach drives to this. E&L activity can be a research activity in analytical chemistry sometimes. I agree some of what is done is now routine, but some CROs struggle to operate this mixed model and still have a viable business.
I am not sure Pharma has really understood this. Time will tell. Some pharmaceutical companies still operate internal teams looking at E&L but given the levels of investment into analytical equipment required, this is under constant pressure.
I do hope that a long-term fix can be made to establish a viable business model for E&L. I would hope that it would include the ability for both small and large CRO to exist to service E&L requirements and that pharmaceutical companies decide on a long-term strategic to support its investment in E&L. I would welcome comment on the points I have raised. I hope you found this post of interest and let me know if you agree or disagree about the future of E&L testing I have outlined here.
Comentários