Recently the publication Life Science Leader interviewed the author of the book, “Drugs, Money and Secret Handshakes.”  The book is about how prices of drugs are determined and who’s involved in pricing decisions.  The author, Robin Feldman, is the Arthur J. Goldberg Distinguished Professor of Law at the University of California Hastings in the U.S.  While she doesn’t mention CDMOs in the book, what she said in the interview will resonate with the CDMO community. 

Mme. Feldman told the interviewer that in a system where pharmaceutical company CEOs are incentivized to raise drug prices in order to boost their company’s stock price, and middlemen jack up prices so they can get their cut, she talks about “The Lone Price Deflators”—the drug development and outsourcing industry, namely CDMOs. Yes, us.

This article provides some insight based on that interview and our own perspective.

Who are the lone price deflators?

This is what Mme. Feldman said:

“I ask this in all seriousness: Are we the only component today in the meandering chain of events that is dedicated to reducing the price of drugs? CDMOs of all sizes and models, and at global locations, exist so biopharma companies can develop and manufacture drugs at reduced pricing.”

She gives these reasons for how CDMOs reduce drug costs:

  • “The CDMO industry is competitive. There are no extraordinary pricing models. We operate on fee-for-service, FTEs, quantities of material delivered, the direct cost of raw materials, plant time.”
  • “Our supply chains and delivery routes don’t delegate to intermediaries tacking on additional pricing that then feeds reciprocal (and agreed upon) price increases throughout the chain.”
  • “CDMOs have added technology, expanded services, integrated, streamlined, undertaken lean and quality initiatives, all to be as profitable as possible by reducing costs for themselves and their biopharma customers.”

Additional ways Seqens cuts drug development costs

She’s right. In fact, the CDMO market came into being for the purpose of lowering development and production costs, which is the main reason pharma companies outsource to us.

The rest of this article will focus more specifically on how Seqens lowers the high cost of drug development.

The #1 cost cutting technique: put in more the effort up front

Everyone is always in a hurry to get projects done—ourselves included. However, spending more time in the lab at  our first class CDMO FTE weekly rate, in order to assure each process works before moving to the next step,  is far less costly than rushing to the GMP manufacturing plant and finding problems there., It’s far more expensive to troubleshoot at this late stage than at earlier stages of development.  Verifying R&D steps, introducing process optimizations and following up with several scale-up steps is the best way to reduce overall project costs.

Sponsors occasionally ask us to skip the scale-up step and move right into the GMP manufacturing plant to save time. That’s a terrible idea.  It can easily wind up costing significantly more, not less, and take more time.

Why? Unpleasant surprises sometimes crop up when scaling up. If caught early, processes can be reworked at a lower cost.  It can save quite a bit.

Efficiencies that help lower the price of drug development

We have always made an effort to be more efficient at every step of drug substance development at every step of the overall drug life cycle

It’s a win-win-win all around. The customer saves and we can keep to an aggressive timeline to complete projects on schedule to the extent possible when dealing with complex chemistry that can be full of surprises.

We focus on projects that can take advantage of our core expertise in pharma synthesis, specialty ingredients, R&D services and special technologies such as biocatalysis.   We can also leverage on the integration of critical raw materials within our two pre-GMP sites supporting our six FDA inspected sites.   That enables us to control costs.  Our in-house expertise results in efficiencies that keep projects on schedule and on budget.  As well, we know regulatory requirements all along the API development path and adhere to those.

Ongoing process improvements that fuel efficiencies

Compared to large pharma, our scientist have been collaborating with a multitude and variety of companies all over the world and are enriched by their experience with different approaches to chemical development. This greatly favors real-life innovation compared to “mono culture” companies that have more limited experience, and therefore a less sophisticated approach to today’s ever more complex projects.

 We are efficient but we grow more efficient every day.  How we improve as we create new chemistry is an ongoing internal process. In our US operations in MA, it’s always discussed at our weekly production meetings.  But we don’t just talk about it. We score every batch on three performance indicators: quality, yield and cycle time and we look for an average score of 90 or better on all three. A lower score triggers a review. Quality and yield usually get good marks. If it’s cycle time that doesn’t score well, we investigate why things took longer than anticipated. Was is the raw materials? Labor to run the process? A maintenance issue?  

In Europe where we usually work on late phase compounds to prepare for global launch, our teams are very well acquainted with the latest guidelines for filing NDAs, including Quality by Design methodologies, which can favor more flexibility in cost reduction after filing.

Technology additions and upgrades

We recently opened an innovative 34,000-square-metre science platform, SEQENS’Lab. It offers a unique ecosystem dedicated to accelerating our customers pharmaceuticals, cosmetics and specialty ingredients projects from early research and development stages to launch and commercial production.  Close to Paris, SEQENS’Lab is the centre of excellence offering an integrated hub of services to bring a new molecule to market with speed, cost effectiveness and compliance.

In the last few years we have also added many new cost effective and green technologies including biocatalysis with a proprietary library of microorganisms and enzymes or flow chemistry, driven by projects and customer needs. Time is money, and if we can do something faster or more efficiently, we do it.

We are proud to realize that Seqens—and the CDMO industry in general—is a part of the solution for lowering the high price of drugs. It’s something we should talk about more. If you would like to discuss, please contact us online  and we will quickly respond.


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