In the wake of the COVID-19 crisis and the subsequent strain placed on medicine supply chains in Europe, Sandoz – the generics arm of global giant Novartis – has moved to strengthen its antibiotics manufacturing presence in Austria.
The planned combined investment of EUR 150 million by Sandoz and the Austrian government over the next five years includes major innovative technology development and implementation for the large-scale manufacture of active pharmaceutical ingredients (APIs) for leading penicillin products at Sandoz’s Kundl manufacturing site.
In a press release, Sandoz noted that Kundl is the hub of Europe’s last vertically integrated antibiotics production chain and that the company is the world’s number one supplier of generic antibiotics.
Our Kundl facility in Austria is the hub and centre of the last remaining integrated production chain for antibiotics in the western world. This joint investment will help to keep it that way
Richard Saynor, Sandoz
Richard Saynor, Sandoz CEO and a PharmaBoardroom contributing author, said in a statement that “This plan is a great example of government and the private sector working closely together to protect the long-term interests of patients in Europe and beyond. Antibiotics are the backbone of modern medicine and our Kundl facility in Austria is the hub and centre of the last remaining integrated production chain for antibiotics in the western world. This joint investment will help to keep it that way.”
Steffen Lang, global head of Novartis Technical Operations (NTO), added that “Novartis is committed to sustain a resilient and competitive supply chain for the essential medicines Sandoz markets. I am proud that NTO is leveraging its market-leading manufacturing expertise to enable Sandoz to further strengthen supply of these vital medicines, and we can build upon the high manufacturing and quality standards at the Kundl site and further deepen its vertical integration.”
Calls to safeguard the European manufacture of essential medicines have increased in recent months with the COVID-19 crisis and its associated lockdowns, border closures, and national stockpiling. These factors have meant that APIs, many of which are manufactured in Asia (see chart below), have struggled to consistently reach Europe. API production has increasingly shifted to lower-cost Asian manufacturing destinations such as India and China in recent years with European manufacturing focusing on higher added-value areas.
While praising the European generics and biosimilars industry’s response to the crisis, Medicines for Europe head Christoph Stoller has called for a reshuffling of European priorities to secure supply of essential medicines. “Now is the time to create sustainable systems by reforming tendering processes, creating new pricing models, and integrating digitalisation,” he told PharmaBoardroom back in July. “We also need to maintain the manufacturing that we have in Europe, making sure all stakeholders understand that Medicines for Europe’s members are a key part of the critical infrastructure, and ensure that the EU has a secure and resilient system for essential medicines in the medium- to long-term.”
We need to maintain the manufacturing that we have in Europe … and ensure that the EU has a secure and resilient system for essential medicines in the medium- to long-term
These sentiments are being echoed by the representatives of small and medium-sized players such as Belgian contract development and manufacturing organisation (CDMO) BePharBel Manufacturing. Vincent Stephenne, the company’s managing director, told us that “A difficulty we are facing in Europe is that so many APIs are manufactured in Asia. It is important that EU authorities find a solution. To give an example, one of the recommendations we give to our partners is to put in place self-mitigation methods to minimise risks from fluctuations in API stocks.” He proclaimed, “It is key for the future of the European pharma industry to establish a safer supply of APIs.”
Sandoz’s move to bolster its European API manufacturing will be welcomed by these stakeholders but it remains to be seen if other companies follow their lead and take the plunge on an essential, but not necessarily lucrative, field.