NEPALESE PHARMACEUTICAL INDUSTRIES AND WORLD HEALTH ORGANIZATION RECOMMENDED GOOD MANUFACTURING PRACTICES (WHO GMP) Jaya Bir

Karmacharya (MBA, MPharm)

Manager, Factory Operations, Omnica

Introduction Dramatic changes are occurring in the 21st century pharmaceutical industry. Transition creates uncertainty, with both increased risk and increased opportunity. Drug development and time-tomarket remain vital to business success in the pharmaceutical and biotechnology industries, but manufacturing efficiency has become equally important to future success and competitive advantage. Major business drivers include increasingly crowded therapeutic categories, powerful and increasingly global competition, weak new product portfolios, increasing regulatory requirements that new pharmaceutical products be proven both safe and effective before they can be marketed and sold. Today the success of a pharma company depends on the quick market growth of a newly launched drug to get the cash back for the development. The market success of the next generation of drugs will depend on the interest of the customers and the worldwide penetration from the very first moment. The Global Pharma Market The global pharmaceutical market is growing with sales of $343 billion in 1999 to the sales of $550 billion in 2004 with growth of 7% compared to previous year. North America accounted for nearly 45 per cent ($248bn) of worldwide pharmaceutical sales, reinforcing its position as the world's largest market, and was also the fastest growing of the top three regions with a rise of 8 per cent. The European Union ranked second with $144bn, up 6 per cent, while third-placed Japan managed a more modest 2 per cent rise to $58bn, reflecting the government-imposed pricing pressures that have dealt a heavy blow to the domestic sector. Non-EU regions of Europe managed a 12 per cent hike to $8bn, but the biggest increase around the globe was seen in China, up 28 per cent to $9.5bn.

The top five drugs for the year were headed by two cholesterol reducers Pfizer's $12bn drug Lipitor (atorvastatin) and Merck & Co's Zocor (simvastatin) with $5.9bn in sales, Sanofi-Aventis
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and Bristol-Myers Squibb's Plavix (clopidogrel) powered into third place from eighth in 2003 with a 31 per cent jump to $5bn. AstraZeneca's anti-ulcerant drug Nexium (esomeprazole) ranked fourth, followed by Eli Lilly's schizophrenia treatment Zyprexa (olanzapine), both with $4.8bn in sales. Meanwhile, more 'blockbuster' drugs - those making more than $1bn a year - are biologics. Among 82 drugs qualified as blockbusters in 2004, 11 of them were biologics. Overall, biologics accounted for about 10 per cent of all worldwide drug sales in 2004. R&D expense of pharmaceutical companies as a percent of sales is among the highest of any industry. Top ten ranking pharmaceutical companies spent as high as 17 to 30% of their sales in R&D with the amount of $2.5b-$9b per annum. The question of why drugs cost so much is often asked. The answer is often related to the amount of money needed to develop a drug and bring it to the market. This is now surpassing $1 billion per drug. Nepalese Pharma Market In 1979, the importation of drugs was estimated to be worth $1.5 millions and there were only about 400 medical shops. According to another study conducted in 1988 the importation of drug was $5 million. Subsequent study in 1992 showed drugs consumption worth $20 million (sales value). At present there are about 11,000 drug retailers and wholesalers in the country. Though the pharmaceutical industries started in seventies, increase of industries began in the eighties. At present, there are about 40 pharmaceutical industries in operation in Nepal. The study by Pharmaceutical Horizon of Nepal (PHONE) shows the consumption of allopathic drugs in the fiscal year 2056/057 (1999/2000) has been $79 millions. The annual increment of consumption has been 18.8%. Twenty six percent of the consumption is met by national industries and rests are being imported mainly from India. The expected growth of pharmaceutical consumption by year 2005 is $186 million.
C hart V C II: onsum tion P iction b p red ased on the P resent In crem ent

100 60

198 37 176 16 90 94 83 37 50 97 71 08

Rs. in Millions

100 40 100 20 100 00 80 00 60 00 40 00 20 00 0

10 56 35 8

18 98

19 92

2 0 /0 00 1

2 0 /0 01 2

2 0 /0 02 3

2 0 /0 03 4

2 0 /0 04 5

2 0 /0 05 6

General Background of Nepalese Pharmaceutical Field In Nepal, pharmaceutical companies have been developed since 1971. The regulatory act, the Drugs Act 1978, was passed and promulgated on 25th October 1978. For implementation of the Drugs Act, the Department of Drug Administration (DDA) was established in 1979 and regulatory norm, the Code on Manufacture of Drugs, was developed only during 1984. DDA is taking active role in enforcement of drug regulatory norms under Ministry of Health.
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After establishment of the DDA, every effort has been made to regulate the pharmaceutical industry to operate with effective implementation of World Health recommended Good Manufacturing Practices (WHO GMP). With stringent regulatory norms Nepalese pharmaceutical industries are in the process of obtaining WHO GMP certification. DDA had initiated the enforcement of GMP norms as guidelines for few years and planning to make the norms as mandatory by next couple of years. Manufacturing Strength Pharmaceutical industry in Nepal can be described as mainly formulating of active ingredients and packing into finished drugs in various solid oral dosage forms. Nepalese Pharmaceutical industry includes the supply of pharmaceutical products from Nepalese and overseas suppliers. All the private pharmaceutical companies in Nepal are family owned business except few. The manufacturer directly imports the active materials required for the production of drugs from India and third countries. There exists a separate sector of traders which imports finished products mainly form India and third countries. The local manufacturers supply the finished products to the domestic market only. The system of subcontract manufacturing is not very much popular in Nepalese pharmaceutical companies. Nepalese pharmaceutical manufacturing industries had long experience of last three decades in the field of formulation developments. The Nepalese industries are being able to manufacture about 26 percent of total market covering mainly oral dosage forms such as tablets, capsules, solutions and suspensions. The product range covers anti-infective, antipyretic, analgesics, haematinics, vitamins, antacids and ant-allergic. About 40 national industries and in operation and couple of companies are in project phase. One of the major constraints of the Nepalese pharmaceutical industry is the strong investor with good intension of establishing pharmaceutical industry importing new technologies and extending its market internationally. With recent consent of WTO as member, Nepal is getting ready for liberal market policy with competition based on standards. In this contest the regulatory body DDA is making all required preparation to uplift pharmaceutical industry standard to WHO GMP level to enhance their capability to sustain competition. With collaborative efforts all sector five private Nepalese pharmaceutical companies had shown their capability to achieve WHO GMP certification from DDA. The WHO GMP certification would open its pharma export market to good number of South African and other countries. With liberal economic policy Nepalese government also encourage foreign investment with required protection and support. Manufacturing Activities The Nepalse pharmaceutical industry's manufacturing costs are relatively lower than those of generic manufacturers in the West. This is primarily due to lower labor and infrastructure costs. With its strength of formulation development in the products mentioned Nepalese pharmaceutical companies have good opportunity to cater the international market. With the neighboring country India having strong competency in pharmaceutical field, Nepalese pharma industry have easy access to required technology, equipment and materials. So India is one of major supplier for pharmaceutical industry in Nepal. Nepalese industries also deal with other countries for importing raw material and some equipment.
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Concept of Quality Management System Historically end product testing is considered as key to pharmaceutical product quality. Traditionally in the pharmaceutical industry, the quality function is divided into two parts, quality control and quality assurance. Quality control centers on testing products to assure their compliance to specification. It is in general concerned with evaluating events from the past. DDA has recognized this deficiency with the often-quoted philosophy that Quality should be built into the product, and testing alone cannot be relied on to ensure product quality. Quality assurance is focused on building quality into a product through activities like validation, process and environmental control, and documentation. Only relatively recently has the pharmaceutical industry begun to emphasize a quality management accountability for continuous improvement of processes, people, and culture. Quality management is about the future, about prevention, and management's role in improving the quality system. The Nepalese pharmaceutical companies had already started the process of change to inherit their traditional approach on quality with the modern concept of quality with belief that quality is never an accident. It is always the result of high intentions, sincere efforts, intelligent direction and skillful execution. The job of quality management is not just advising a sampling plan for the acceptance/ rejection of the incoming materials or products and controlling manufacturing process conditions. It is in fact a job at every stage of the company's activities. Quality Management is a company wide activity, involving the combined efforts of various departments such as R & D, engineering, purchase, production, Quality Control, Quality Assurance, Human Resources, Marketing, Distribution, Warehouse, etc in different phases with a view to achieve the desired quality of the end product. Quality awareness must begin at the very conception of the product and continue through various stages of development and manufacture and even during its use to get feedback from the users, which is essential for continuous product improvement. Quality of Medicine: Locally Manufactured Vs Imported A medicine to claimed, as quality product must have following characteristics: Identity-The correct active ingredient is present. Purity-The drug is not contaminated with potentially harmful substances. Potency -The correct amount of active ingredient is present, usually between 95 and 110 percent of the labeled amount. Uniformity- Consistency, color, shape, and size of the dosage form do not vary. Bioavailability- Bioavailability refers to the speed and completeness with which an administered drug enters the blood stream. This must be consistent to provide a predictable therapeutic result. Drug bioavailability differences exist between manufactures of the same product. Therefore, careful evaluation of generic drugs may be necessary before purchase and use. Stability-The activity of the drug is ensured for the period of time stated on the product label, that is, until the expiration date. Pharmacopoeial Standard-A drug is of good quality if its characteristics meet the standards described in a widely accepted pharmacopoeia such as the British Pharmacopoeia (BP),
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European Pharmacopoeia, International Pharmacopoeia (IP), or (USP).

United States Pharmacopeia

With strong regulatory enforcement of WHO GMP certification requirement for restriction of import and marketing products manufactured outside the country had resulted in phase out of many products, which are being market earlier comfortably. This had clearly indicated that all the imported products available are not of the expected standard. Only those products with required standard are allowed to remain in the market. This had opened the eyes of patients, prescribes and pharmacist to be cautious about the use of medicines available in the market. On the other hand the close monitoring of national manufacturers towards stringent implementation of WHO GMP norms in manufacturing medicines had resulted in enhancement in quality of the medicines manufactured locally. This requirement had also made the national pharmaceutical companies to develop their technical competency to achieve the WHO GMP requirements in strict sense during manufacturing process on one hand and to face the competition in the market with imported products on the other hand. In this connection of development and competition, last year five Nepalese pharmaceutical companies had got the success in getting WHO GMP certification from DDA. As WHO GMP certification is a well-accepted global concept to assure production of quality medicines, this had given good confidences among the prescribers and users towards the use of medicines manufactured by national companies. This development also had proved the competency of professionals and commitment from higher management in effective implementation of WHO GMP norm for manufacturing quality medicines. The national companies are under close supervision of control of regulatory authority and any shortfall made can be identified and corrected with very short span of time. The regulatory body can enforce the stringent regulatory norms with the objective to develop those who can meets the requirements and to phase out those who fails to meet the requirement. This give serious concern for the companies to follow the regulatory norms strictly to have their existence in the market. But in case of imported products, the monitoring product quality requirements are done based on documented evidence only. This may restrict in monitoring the manufacturing operation closely skipping to notice if any shortfall is being practiced at factory during manufacturing operation. Some companies may not act with the required extent of seriousness with DDA requirements, as even if they loose their market presence in Nepal, their existence is not at risk. Above-mentioned facts had been reflected in good growth in the acceptance of medicines manufactured by national pharmaceutical companies. The pharmacists, other professional and higher management had gained their confidence and expressed their commitments in developing the industry standards. However every one had strong challenge and responsibility to develop every manufacturing unit to equal level of WHO GMP standards so the every product manufactured by national companies shall be claimed to be manufactured as per WHO GMP certification requirements. Scope for Investment and Development of Pharmaceutical Industry in Nepal Nepalese companies need to attain the right product-mix for sustained future growth. Core competencies will play an important role in determining the future of many Nepalese
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pharmaceutical companies in the post product-patent regime after 2005. Nepalese companies in an effort to consolidate their position will have to increasingly look at merger and acquisition options of either companies or products. This would help them to offset loss of new product options, improve their R&D efforts and improve distribution to penetrate markets. The simplified regulatory norms for those who are coming up with all required concept would of one of biggest advantage for foreign investment. The DDA also allows manufacturing latest drug molecule if one can provide sufficient evidence of safety and better efficacy over the similar existing drug. Research and development has always taken the back seat amongst Nepalese pharmaceutical companies. In order to stay competitive in the future, Nepalese companies will have to refocus and invest heavily in R&D. The Nepalese pharmaceutical industry also needs to take advantage of the recent advances in biotechnology and information technology. The future of the industry will be determined by how well it markets products to several regions and distributes risks, its forward and backward integration capabilities, its R&D, its consolidation through mergers and acquisitions, comarketing and licensing agreements. The R&D activities may as well be developed with IndustryAcademic collaborative works. The upcoming company with good backup of research and development would have easy and comfortable stay and sustainability in the Nepalese pharma market. Conclusion Quality is fundamentally about customer focus. Both the pharmaceutical industry and the DDA have this in common; their customer is the patient. While quality control and quality assurance are important, best quality practice today emphasizes the management of the quality system. The quality system consists of important processes, highly skilled people, and an empowering/motivating culture. Training of personnel at all levels must be a priority for management. A model of a quality system with the specific requirements of WHO GMP is required to achieve quality. Continuous improvement of the quality system is assured by having an effective quality planning process. All employees must take responsibility for the quality of their work. A critical but difficult process is communication. Management must provide the direction (topdown), listen (bottomup), and encourage cross-functional cooperation. It is clear that quality depends on the leadership of the organization

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