The Italian contract development & manufacturing organisations represent a leading industrial sector for the entire national economy. Farmindustria’s representative Giorgio Bruno tells about the reasons for success and the future challenges
The Italian pharmaceutical industry is made up of more than two hundred companies producing medicines and vaccines and some other hundred active ingredients producers, for a total value of production estimated in approx. € 30 billion in 2015. Employment is also increasing despite the economical crisis, and reached approx. 63 thousands units in 2015 (+1,200 vs. 2013): numbers that double when considering also the upstream sectors, i.e. machinery and packaging. The main part of production (73%, 22 mld €) goes for export, as Mr Giorgio Bruno, president of the Contract Development & Manufacturing Organisations Group of Farmindustria (the Italian association of the pharmaceutical industries) told during the CPhI in Barcellona. The sector invested € 2.6 billion in 2015 – € 1.4 bln for R&D activities and € 1.2 bln for equipment and high technology – and Italy is currently at the first position in Europe as per value of pharmaceutical manufacturing (€ 1.5 bln), before Germany (€ 1.2 bln) and France (€ 1.0 bln). The hope of the Italian industry is to soon conquer the absolute first position, as Mr Bruno tells to NCF Pharma World: «We are playing the game. We are by now at a position higher than Germany as per value of production/employee, and we are at the second place as per total quantity of production»
Italy-Germany: a never ending story
According to Farmindustria, the increase in the turnover of the Italian pharmaceutical CDMO (+3.6%) already exceeds the one for Germany (-2.9%) in years 2008-2015 (table 1). The Italian export increased 31.8% over the same period (26.8% for Germany). «We are working to final overtake, but we need help, especially by the Institutions. The Italian Government understood the industrial and economic value of our sector – further tells the president of the CDMO Group -. We expect that the Italian medicines Agency (Aifa) shall also support us speeding up the time needed for inspections and authorisations. The Agency did already many things, I wish to underline how it greatly supported our qualitative growth. Inspections are a way to be always up-to-date, we are no second to anyone in this».
The strict regulatory framework established by Aifa revealed to be an important strategic element to attract foreign investments in Italy, as also remarked during the recent Forum of Aschimfarma, the industrial association of pharmaceutical active ingredients manufactures (see the article at page 10). Italy has to be ready to face Germany’s countermeasures, said Aifa’s managing director Luca Pani in that occasion. «Germany can implement countermeasures, and be more competitive also in the regulatory processes. I work for a multinational company and I can tell my German subsidiary needs shorter times to get the approval of new investments or new facilities. Procedures are somehow quicker and simpler in Germany than in Italy. But our industrial sector is ready to act quicker, and Aifa should also help us in doing so. We need to create a better networking with the Agency, in order to increase the dialogue and the competitiveness», says Giorgio Bruno. Farmindustria asks once more to increase the number of Aifa’s inspectors, an indispensible measure to speed up times for regulatory auditing and to increase the attractiveness of Italian CDMOs. «We are at the top level as per quality of human resources, who are very flexible and able to quickly solve problems. This is why we are able to adapt to any sort of requirement coming from our customers», comments Bruno.
The numbers of success
The Italian pharmaceutical CDMO is growing since 2005; the export increased 34% and value of production 24% in years 2010-2015. Non-sterile products represent yet the great part of Italian production (53%), but the higher growth relates to the highly active substances (+153%) and biological medicines. These last two categories cover together the 17% of the total production. Export is mainly directed towards the United States, Japan and Canada (+304%) and emerging countries (+89%); the Euro market area in decreasing its relevance (-15%) and the domestic one is keeping constant, according to Farmindustria. «The high quality of our production is the reason for the increase of exports towards US, Japan and Canada. Macroeconomics data shows the stagnation of Europe, where consumptions are in stand by and many countries are implementing politics to limit health expenditure. Wealth is increasing in emerging countries, the demand of health is higher here and we are trying to satisfy it», says Bruno.
Excellence is the standard
The excellence typical of the Italian pharmaceutical sector should become a model to boost the recovery of the entire national economy. A target shared also by the industrial sector, says the president of the CDMO Group: «We maintained our top level quality of production also in times when competitors were fighting for lower prices and lower costs of labour. We never settled for a compromise, we have raised the bar and we will continue doing so: we want to be leaders in the pharma sector also as for Industry 4.0, which is a very actual theme». Automation plays a central role in the modern pharmaceutical manufacturing plant too, as a way to achieve higher productive standards: planning of manufacturing according to the real needs of the market, integrated manufacturing systems as well as for quality and process controls are just few examples of the possible applications of automation. «We always said that the quality of manufacturing is not something to be checked just at the end of the process: it comes along the entire process. The chemical and pharmaceutical industry has not many problems as per labour safety, we have always used ergonomic working emplacements. We also addressed the energetic consumption, and many pharma companies possess cogeneration plants», explains Giorgio Bruno.
Meeting the customers’ requirements
Another key for the success of the Italian pharmaceutical CDMO is its ability to support customers with all their needs and along the entire development chain, from R&D to formulation and reformulation studies, from technology transfer to the rapid definition of the final form of the medicinal product. «We can support our customers as per regulatory activities and the drafting of documents needed to register the product in different countries – adds Bruno. – We can handle clinical studies starting from phase 1, as many of our manufacturing plants are authorised to prepare batches for clinical trials. Production is then gradually scaled up from phase 1 to industrial scale, allowing for continuity of supply and product’s growth according to the quality by design concept. This makes registration easier, and we become able to manufacture the product for a longer time, with greater industrial stability». According to estimates from Farmindustria, CDMO’s services should reach 47% of their total business in 2020, the remaining 53% being traditional manufacturing. The great part of services (42%) should refer to procurement of active ingredients, 29% should come from packaging, 26% from development and 3% from logistics and distribution (Prometeia – Farmindustria Survey, 2015).
The human factor
The people working in the Italian pharmaceutical industry is another key factor of its success. «We have a very high quality of human resources, something that directly impacts on the very high quality of the industrial output. Manufacturing activities which moved East are now coming back to Italy», further tells the president of the CDMO Group. Labour costs in Italy are lower with respect to other industrial countries such as Japan, Germany or the United States. According to the “Invest in Italy” communication campaign of the Italian Ministry for Economical Development, the annual salary for an engineer is € 38.550 in Italy compared to the European average value of € 48.500. Data from the Organisation for Economical Co-operation and Development (OECD) show that Italian salaries are the lowest in Europe and that they increased less (+1.18%) in years 2011-2014 compared to UK (+1.69%), Germany (+2.32%), France (+1.29%), Belgium (+1.43%) and Ireland (+2.10%).
More than 100 thousand Italians moved abroad in 2015 as a way to fight the economical crisis: many are retired persons, but also a great number of young and highly qualified people looking for a job. «We need to maintain the high quality of our operators. In order to do so we need also the support of the academia: university courses should be closer to the current industrial situation», comments president Bruno. The Job Acts politics set forward by the past Italian Government has been of great help in increasing the number of operators employed in the pharma sector, according to Giorgio Bruno. The new Government just installed as we are writing: the wish is it will continue to support this strategic sector for the entire industrial economy.
Table1. The main values of the pharma industry in Italy and Germany (Farmindustria)
– of which 2013-2015
– of which 2013-2015
|Value added as % of turnover
2005 vs. 2008