The trend has been inverted and Italy is again at the global top ranking as for manufacturing of active pharmaceutical ingredients. The new challenges for the sector have been discussed during the annual Aschimfarma Forum.

Italy is again at the global top ranking as for manufacturing of active pharmaceutical ingredients

After a couple of decades characterised by the move of multinational big pharmaceutical companies towards Asiatic markets where to buy active ingredients at lower prices than that offered by the European producers, the trend has now inverted. The long tradition of excellence as per quality of its production has been once again confirmed, and the Italian API’s manufacturing industry has regained its leading position as one of the world-wide most appealing providers of active pharmaceutical ingredients.

The growth of the sector is continuous since 1993, and even in the times of crisis APIs manufacturing continues to represent one of the few positive economic sectors of the Italian economy, together with pharmaceutical manufacturing and automotive.

Despite the current positive framework, new challenges are waiting the Italian API’s industry wishing to confirm its leading position: they were discussed during the Aschimfarma Forum, the annual meeting of the Association of the Italian producers of active pharmaceutical ingredients that took place in Milan in October 2016.

All the different stakeholders were represented and reported their perspective for the future of a sector critical for the growth and competitiveness of the entire Italian economy.

Synergy of action is the key

The general manager of the Italian Medicines Agency (Aifa), professor Luca Pani, and Aschimfarma’s president, Dr. Gianmario Baccalini, recalled the initial difficulties of dialogue and the perplexities of the industrial world when Aifa increased its requirements as per quality of API’s production and related inspections.

Gian Mario Baccalini, Aschimfarma
Gian Mario Baccalini, Aschimfarma

According to dr. Baccalini, this has been indeed the key factor that allowed the sector to win the race with the Asiatic concurrence. The Italian Medicines Agency supported the industrial part at the European level on the request of a more strict inspection policy, a position that ended up with the closure of approx. 400 production facilities in China and India.

According to dr. Pani, the challenge towards high quality of active pharmaceutical ingredients has been won thanks to the synergistic action of Aifa and the entire Italian industrial sector, which made high investments in order to improve the technological and quality level of the productive plants to the new top level standards required by the Agency. Aschimfarma’s president remembered also how the entire sector has invested in human capital and Industry 4.0 technologies as a key competitive advantage to win the challenge. The collaboration between Aifa and API’s industry has changed in recent years to become more pragmatic and strategic, said Mr. Baccalini.

New challenges are coming

The wishes of dr. Baccalini is that the Italian API’s industry will be able to fine tuning according to market’s requirements in order to be able to promptly understand new messages and produce new solutions in the shorter time possible. China and India a improving the quality level of their production, told economist Giampaolo Vitali, and will close the quality gap in few next years. The Industry 4.0 approach represent the new frontier for Italian manufacturers wishing to innovate to successfully compete on the global scenario: it requires big investments in future years in order to innovate processes and to interconnect equipment. The increasing amount of biological medicines in the development pipelines shall require also the building of new facilities for the manufacturing of this type of products. The capacity to create industries of greater dimensions might also represent a medium-long term target from the investment perspective and a competitive advantage for the italian API’s sector, added professor Vitali. Biological medicines could represent in few years the 75% of the total market,said dr. Pani,  inverting the actual ratio that sees small molecules-based medicines still at the first position (75% of total). The Italian API’s manufacturing might find here an important opportunity of growth, as the current global capacity to manufacture monoclonal antibodies is far to be sufficient. But the technological barrier is higher than for small molecules, and inspections are also more severe: according to Aifa’s general manager, the Italian Medicines Agency is ready to support the industry, for example, by mean of the open advice instrument. The Italian pharmaceutical manufacturing sector already has 54 production plants for biological products already available: a good starting point, said Farmindustria’s vice-president dr. Francesco De Santis. Italy is yet a leading manufacturer of vaccines.

Another issue to be carefully considered are the actions Germany could set up in order to protect its API’s producers and to resist to the increasing role of the Italian pharmaceutical and APIs industrial sectors and the possible issuing of a novel European regulation for the chemical and pharmaceutical industry. According to Mr. De Santis, the new challenges refer also to the need to innovate R&D models towards the creation of interconnected networks: something that requires investments and professional skills. These last ones might be found within the Italian universities, which should become more prone to the protection of the intellectual property created by their researchers. Emerging trends requiring attention in order to open new business opportunities are the bridging knowledge area, i.e. the use of nanotechnology for the targeted delivery of drugs, or the innovative sensors that might help to improve the compliance to therapy. The first product of this new class are the oral tablets of aripiprazol containing an injectable micro-chip jointly developed by Otsuka Pharmaceutical and Proteus Digital Health: the product received in April 2016 a Complete Response Letter (CRL) by the U.S. Food and Drug Administration.

The support to the Italian API’s industrial sector has been also acknowledged by Dr. Paolo Bonaretti, counsellor of the Italian minister of Economic Development.

How to increase the presence of big pharma in Italy

The annual meeting of Aschimfarma hosted also the point of view of big pharma, represented by Regan Shea, senior vice-president Chemical and Biologics Operations at Gilead. The American multinational company buys approx. 20% of its APIs (6/13 of commercial APIs and 3/22 of the developmental ones) from six different contract manufacturing Italian companies. According di Mr. Shea, Gilead is a very difficult client to deal with, as the company often requires very rapid improvements to its suppliers. An already proven ability for its Italian CMOs, even if some regulatory improvements would be also needed in order to speed up the entire process, thus allowing to increase the attractiveness of the country for foreign investments. Certain times for authorisation and the possibility to extend the notification procedure also to phase 2 clinical studies, and not only to phase 1 trials, are among the priorities Aifa should address, suggested Shea. The request saw the prompt acknowledgement of Dr. Marcella Marletta, general manager of the Italian Ministry of Health. Another request coming from big pharma is the possibility to facilitate the production of the new generation anti-tumoral active ingredients, which are no longer part of the highly potent and cytotoxic APIs.

Another plus of the Italian “way” to API’s production which shall distinguish the country from other competitors is the increasing attention paid to the health & safety assessment (HSE): a plus that find the increasing interest of big pharma in order to fulfil their environmental policy and sustainability. The costs sustained to improve HSE could represent for Italian suppliers an important opportunity of growth, as environmental audits are more and more common as a way for big pharma to decrease the regulatory burden and to achieve reduction of costs related to the management of incident’s risk and plants’ closure.


The numbers of the Italian APIs’ industry

The active pharmaceutical ingredients manufactured in Italy cover 10% of the global market for APIs, for a total value of $ 43 billion in 2014. The great majority of the production (85%) is addressed to the export: mainly to U.S. (40%), other European countries (36%) and Japan (18%).  The total turnover amounted to $ 4,4 billion in 2014, an exceptional result for the Italian industry in the difficult years of the global economic crisis. The pharmaceutical sector, and among it API’s manufacturing, should represent a positive example for the revamping of the entire industrial economy of Italy. According to a research presented by economist Giampaolo Vitali, the manufacturing of active ingredients has a greater profitability (17,1%) compared to the pharmaceutical industry (14,4%) and the chemical sector (7,8%). According to the data of the Italian National Institute of Statistic (Istat), the added value/per person is approx double for the API’s industry compared to the overall Italian manufacturing. Labour cost/per person is also 50% higher, and investments/per person are triplicated with respect to other industrial sectors. Highly qualified employment is central for the competitiveness of the sector and the high quality of production.

Table 1. Main data for the active pharmaceutical ingredients manifacture (Giampaolo Vitali/Aschimfarma, Istat)

Raw pharmaceutical ingredients industry Pharmaceutical industry Chemical industry Other industry
Added value/per person 232 251 165 100
Labour cost/per person 151 168 132 100
Investiments/per person 302 184 189 100