Every medicine you take contains both pharmacologically active and inactive substances. The active substances, known as active pharmaceutical ingredients or APIs, are what make your medicines work to fight or prevent illness. The inactive substances keep them stable, hold them together, and allow you to swallow them as a pill, capsule, or syrup, or receive them intravenously through an injection or drip.
Regardless of where in the world you are living, where your medicines are made, or what company they are bought from, they likely contain ingredients manufactured in China or India–as these countries manufacture and supply the bulk of the chemical substances used in medicines sold across the world (although India is also highly dependent on China for medicine APIs).
It is estimated that around 80 percent of the active substances used in medicines in Europe are produced in China and India. The United States Food and Drug Administration admits it does not actually have the data to assess where all the APIs used in medicines sold in the United States come from, given poor transparency in the supply chain.
Like the rest of the world, South Africa is highly dependent on imported APIs. Buti Manamela, the Deputy Minister of Higher Education, Training, Science and Innovation, this month said, "South Africa is the largest procurer of antiretrovirals in the world… and sadly, 100% of the APIs used to make ARVs are imported."
Manamela added, "It, therefore, goes without saying that reliance on the importation of finished drugs or the API itself not only burdens the country with a security of supply risk but also results in a significant trade deficit."
Consolidation in the East
The consolidation of API manufacturing in a handful of countries, and specifically in China and India, took place over the last few decades as companies around the world sought to reduce their expenditure on APIs.
APIs are typically the largest cost contributor in medicine production and, in the highly competitive generic medicines space, securing the lowest possible prices for APIs can mean the difference between winning or losing a lucrative tender.
For decades, India and China have been able to offer cheap APIs to medicine manufacturers, due in large part to low labour costs and less stringent environmental regulations. But this is now changing, as wages in both countries are rising and environmental regulations are strengthening. In an effort to reduce pollution, for example, China has shut down multiple API producing plants in recent years.
Even before the emergence of COVID-19, security and global health experts began warning that global dependence on imported medicine APIs from a few countries posed a critical risk to health and security.
Global health organisations that long supported procurement of cheap APIs from India and China–particularly as the world sought to treat the millions of people with HIV in need of daily life-saving medicines–began shifting their rhetoric towards calling for investing in and building medicine and API manufacturing capacity in more countries and regions around the world to improve medicine supply security.
In what was billed as an important shift towards promoting more localised medicine production, six influential global agencies – the World Health Organization, the Global Fund, and four United Nations agencies – pledged in 2019 to collaborate strategically towards strengthening country and regional level medicine manufacturing capacity.
The rapid spread of COVID-19 in 2020 further heightened concerns over the dependency on China and India. The COVID-19 pandemic led to the closure of factories producing critical raw ingredients, medicine export bans from India, and unambiguous country-first nationalist responses to COVID-19.
A local contender?
Amidst this shifting global landscape, a Pretoria-based company has been quietly positioning itself to throw its hat into the highly competitive API space.
The company CPT Pharma was established as a subsidiary of Chemical Process Technologies in 2014. Chemical Process Technologies says it has 21 years of experience in chemical manufacturing and synthesis, including in producing APIs for use in animal medicines.
The company decided to move into the human APIs space in 2012, with a focus on developing new, more efficient manufacturing processes to produce these APIs. By optimising manufacturing processes, the company hopes to get an edge over its competitors who already have established manufacturing operations and markets.
CPT Pharma appears to have a healthy pipeline of eight APIs in various stages of development, which it hopes to commercialise in the coming years. Its current pipeline consists of three APIs used in TB medicines, one API for an epilepsy medicine, one API for worms treatment, two APIs for HIV medicines, and one API for a COVID-19 treatment.
The manufacturing processes for production of the TB, epilepsy, and worms treatment APIs in CPT Pharma's pipeline were developed by CPT Pharma itself. The COVID-19 API (molnupiravir) manufacturing process was obtained through a licensing and technology transfer arrangement with the Medicines Patent Pool, and the HIV medicine production technology was transferred to the company from Medicines for All Institute (M4ALL). M4ALL is funded by the Bill & Melinda Gates Foundation to develop novel pharmaceutical manufacturing processes for open-access sharing. CPT Pharma has been tasked with further developing the technology transferred from M4All to enable manufacturing at scale.
Getting regulatory approval
However, before CPT Pharma can seek regulatory approval to begin selling its APIs to medicines manufacturers, it must demonstrate that its manufacturing processes work and are scalable.
To test the scalability of manufacturing processes developed at lab level and the quality of APIs produced at scale using new manufacturing processes, CPT Pharma built a pilot plant in Waltloo, Pretoria. This pilot plant received approval to manufacture APIs for use in human medicines from the South African Health Products Regulatory Authority (SAHPRA) in 2020.
Hannes Malan, managing director of CPT Pharma explains, "This is a dedicated pilot plant with reactors that are about one-tenth of the scale of a commercial plant. The reason we built it as a pilot plant is, first of all, it's multifunctional. So, we can have different configurations and it also makes provision for different molecules to be manufactured."
CPT Pharma has completed pilot runs on three of the APIs in its pipeline at its pilot plant and is developing regulatory applications using data from the pilot runs for submission to SAHPRA to gain approval to start selling these APIs to medicine manufacturers.
The pilot plant was built with investment of around R50 million, jointly funded by CPT Pharma, the Industrial Development Corporation of South Africa (IDC), and the Technology Innovation Agency.
CPT Pharma is now in talks with investors to raise funds to build a multi-purpose commercial manufacturing site, with around five to seven plants each dedicated to production of a different API, as well as an on-site waste treatment facility. They estimate that building this multi-purpose manufacturing site will cost between R500 and R700 million.
However, while raising funding for the multi-purpose manufacturing site, CPT Pharma has also broken ground on a commercial manufacturing site for production of isoniazid API, which it hopes to have ready for regulatory assessment in the first quarter of next year. Apart from forming part of the standard four-drug combination used to treat drug-susceptible TB, isoniazid is also widely used as TB prevention therapy, alone or paired with a second drug.
"We are putting up the isoniazid plant at the back of the existing pilot plant… we need to confirm and demonstrate this to the government and to other people in South Africa that [local API manufacturing] can be done," says Malan. "All of our competitors are saying it can't be done, for very obvious reasons, they are protecting their business and their market. So, we need to get into the market very soon and we've decided on isoniazid because it's a reasonable market still in South Africa," he adds.
Malan explains that the isoniazid plant may also be used to produce the COVID-19 API molnupiravir. "The plant that we are building for isoniazid, we did a quick review, and we can use the same equipment, with a few small changes in the process to actually manufacture molnupiravir as well," he says.
There is some uncertainty over who CPT Pharma will be able to sell molnupiravir API. Its license from the Medicines Patent Pool prohibits the sale of medicines produced with its API into South Africa's private health sector and the public sector has taken a decision based on current information not to use the medicine. Hannes notes, however, that CPT Pharma can sell its API to medicine manufacturers selling molnupiravir in other countries covered under the MPP licensing deal.
Once the isoniazid plant is approved to manufacture APIs and CPT Pharma receives regulatory approval for its isoniazid API, the company hopes to corner 60 percent of the domestic isoniazid market.
"We've designed the plant to be able to produce enough to capture 60% of the local market because we know that people will never, you know, only go for a single supplier," he says. He adds that they will be able to sell it at the same price that is currently being paid in the open market.
Wieda Human, media liaison for the advocacy organisation TB Proof told Spotlight "TB Proof welcomes the potential that CPT Pharma can bring to ensuring better access to TB preventative therapy and TB treatment… by shortening the supply chain and… decreasing reliance on imported medication."
Interest from local producers
Derek Maree, Industrial Affairs Manager at Sanofi South Africa, a company that produces TB medicines in South Africa, says, "There is a market for locally produced TB APIs in South Africa from a cost and supply reliability point of view. Sanofi South Africa is open to using CPT's material," says Maree. "Sanofi South Africa has collaborated with CPT Pharma in lab-scale stages to develop these APIs. CPT Pharma's material will have to be of the required quality and be price competitive."
Stavros Nicolaou, Senior Executive of Aspen Pharmacare, which also produces TB medicines locally, says of CPT Pharma's isoniazid API, "The product has got to be competitive and of the right quality, then, of course, we would consider it."
Nicolaou, however, notes that the lack of protections for local medicine manufacturers in the Department of Health tenders means a large portion of the TB medicines used in South Africa are imported from medicines manufacturers in India and China who are unlikely to use South African produced APIs.
"If CPT is to offer the product of course they must be competitive, but if the Health Department is not implementing the localisation policy to its maximum, then you are going to be more and more dependent on imported product," says Nicolaou. "Generally, when you want to export something, you usually need to get on domestic volumes first to get the economies of scale."
API Technology Innovation Cluster
In addition to developing its own pipeline of APIs, CPT Pharma will also host the API Technology Innovation Cluster launched this month. The cluster, a joint initiative of government, academia, and industry, will be located at CPT Pharma and overseen by Northwest University.
Through the cluster, select research projects underway at universities across the country will be given the opportunity to utilise CPT Pharma's facilities to develop and pilot novel manufacturing processes for APIs. According to reporting by Engineering News, the initial projects selected by the cluster will focus on developing processes to manufacture APIs used in antiparasitic, antimalarial, and antiretroviral medicines.
"Those researchers will eventually end up in our research facility collaborating with our research team, and then develop a process we can take into the pilot plant and prove the concept and hopefully end up with a drug master file," says Malan. He adds that technologies developed through the cluster "will belong to the person who's developed it, it doesn't belong to CPT Pharma".
'The market is bigger now'
While developing domestic API manufacturing capacity is a slow process–it has been eight years since CPT launched CPT Pharma the company has methodically positioned itself to develop novel manufacturing processes, pilot these processes, and eventually commercialise them.
Changes in the global landscape since its establishment may mean that, if it is successful in receiving regulatory approvals to market its APIs, there is not only domestic and regional but also international demand for its products.
"We actually believe that the market is bigger now since COVID," says Malan. "People in Europe and the US are concerned about being dependent on China and India for all sorts of reasons and they [are] always looking for different suppliers and other suppliers. There's also the opportunity that if we are competitive, that we can actually export these products," says Malan, adding, "I honestly believe that if you create the capacity, it will be filled."