An excipient is the inactive substance that serves as the vehicle for a drug or other active substance to get into a patient’s system and work to target a problem. High-quality excipients are preferred by pharma companies in developed markets such as North America and Europe, while emerging markets such as India, China and other countries in the Asia-Pacific region tend to use cheaper alternatives that may not have been as rigorously tested as their Western counterparts.

Global market reach

China has over 90 excipient manufacturers in its pharma industry – about a third of the number of pharmaceutical excipients in the US market, and a sixth of those in Europe – and the country expects its output of excipients to more than double, to about $8.9 billion, before 2020. The country is continuing to see investments from foreign companies: Colorcon, Meggle, Roquette and Degussa have all set up in China.

Volumes of excipients from emerging markets like China and India are expected to soon outpace output volumes from North America and Europe. In the first half of 2014, China exported over $32 million worth of gelatin capsules. However, reports from market sources also note that China still relies heavily on the import of film-coated powder, PVP and other new, high-end pharmaceutical excipients to make up the shortfall in lack of expertise and resources.

The market concentration of Chinese excipient giants is low compared with the conglomerates that dominate most Western pharmaceutical markets. Industry leader Er-Kang Pharmaceutical only controlled about 2.7% of the market in 2013, though it holds 116 types of pharmaceutical excipients and a capacity of over 45,000t.

This continued growth in the market will depend on the Chinese economy not faltering, but China’s 2016 economy, with its stock-market judders, is not the threat to Western dominance it once was. The Indian market could also lead the charge – and a revolution – in excipients to cater to its huge medical industry, as its growing focus on medical tourism (based on Europeans coming to get cheaper treatments) and a large domestic middle class mean it could seek cheaper alternatives.

Risk and regulation

These companies are willing to risk more by not requiring such rigorous trialling and legislation procedures as companies in the West do – but why? Cost savings are certainly part of the equation. Western companies might in turn be inclined to put pressure on the industry to remove the profit-hampering regulations that govern them, but it is unlikely such pressure would have much effect, considering the current emphasis on industry safety.

Europe has extensive legislation for excipients. A long-established and fundamental requirement of The European Medicines Agency’s (EMA’s) good manufacturing practice (GMP) is that medicine manufacturers qualify their suppliers. The EMA requires this for excipient suppliers "regardless of where in the world those suppliers are located", says an EMA spokesperson.

"As pharmaceutical manufacturing is increasingly globalised," they add, "it has become more important for manufacturers to also be able to verify their supply chains. This means they can confirm that their excipients are sourced from qualified and approved suppliers.

[The MHRA] maintains that there is no possible way the laxer laws could affect any drugs if they are exported to the EU.

"Medicine manufacturers located outside of the EU but supplying within are required to follow EU GMP rules," they say on the subject of EU imports. In addition, EU importers are licensed as manufacturers, and have a particular responsibility for ensuring that the manufacturers they source from outside the EU are following EU GMP rules.

The law from the European Commission clearly states that "all excipients in parenteral, ophthalmic and topical medicinal products must appear on the labelling", and penalties for this are harsh. The information must be in "clear and understandable terms for the patient. However, taking into account that applicants may have different house styles for their package leaflets, it is not required that the information should be applied verbatim to the package leaflet. The content or meaning of the text must not be changed". The law further states: "All components of compound excipients or mixtures should be declared, listed under a general descriptive term. Any component with a recognised action or effect should be mentioned on the labelling."

With this sort of detail, it’s not hard to see that excipients in Europe are closely monitored. But what of China, where – as shown by the 2015 Tianjin port explosion and the baby milk formula scandal several years earlier – even when laws are in place, they are ignored? Fears are that this will hold true in the international excipients market too, as manufacturers water down their stringency of testing and accountability to match the cheaper and easier methods of other countries. Usually this goes the other way – growing economies eventually catch up to the legal rigours of long-standing Western scrutiny – but this trend seems to be much slower now than in the past.

MHRA takes action with assessment

The Medicines and Healthcare Products Regulatory Agency (MHRA) is working to identify what effect the growth in China, India and South-East Asia is having on the global excipients market – specifically on Western pharma companies operating in these regions.

"Pharma manufacturers producing medicinal products for the EU are required to source their raw materials from approved suppliers," says a spokesperson for the MHRA. "This applies irrespective of where the pharmaceutical manufacturer or the excipient manufacturer is based."

The MHRA covers the assessment process for marketing authorisation applications that controls excipient usage in the market; MHRA staff members review the selection, use and control of excipients in pharmaceutical formulations. This assessment process considers the justification for the excipient at the proposed level, its safety in the intended patient population and aspects of quality control. The MHRA is, in this capacity, at the root of any potential problems in the supply chain, with inspectors assessing pharmaceutical manufacturers for compliance with EU GMP guidelines. It also works on the development of pharmacopeial monographs for excipients: the written background of information on drug development that all manufacturers must legally submit to be released on the market.

This means the MHRA watches all levels of EU-manufactured pharma with a close eye. While excipients in the Asian market could be free to change their makeup to try to slip under the radar, it maintains that there is no possible way the laxer laws could affect any drugs if they are exported to the EU. "Compliance with EU GMP is assessed through regular inspections by European regulatory authorities," says the MHRA.

Pharmaceutical companies are fenced into only being allowed to sell and distribute the most stringently tested products, so even if it was in these companies’ interests to take advantage, they could not. If the pharma industry asked regulatory bodies or governments to relax laws and regulations on excipients or labelling, the MHRA doubts it would be allowed to happen.

"Additional controls on excipients were introduced in Europe through the Falsified Medicines Directive," the organisation says. The guidelines, adopted in 2013, specify tougher rules on the controls and inspections of producers of active pharmaceutical ingredients; and strengthened record-keeping requirements for wholesale distributors.

However, the possibilities for US and European-based companies to lobby Asian governments’ regulation bodies to tighten up laws around pharma production do exist, and could bring an end to the discrepancies between the markets. With this in mind, there may soon be such campaigns, perhaps led by Western agencies, to pressure developing-world countries into introducing more stringent laws around drug development – but whether or not these would work is another matter.

The cost of research

The EU’s (and North America’s) strong laws are good for the consumer and may avoid tragedies in the future caused by drugs that are not tested rigorously enough, but do they interfere with the more experimental side of research and development? Following the Falsified Medicines Directive in Europe, additional controls on excipients were introduced by the European Commission, published as supplementary guidance in 2015, which might put pharma companies at a disadvantage regarding the more experimental aspects of excipient research.

The market for European excipients is only getting tighter too, as these new requirements are also reflected in EU GMP. Excipients that are known to have a recognised action or effect – including undesirable effects – may need to be declared on the labelling of medicinal products. All excipients present in products to be injected, those to be applied to the skin and eye preparations must also be named on the product’s label. Additionally, any novel excipient included in a medicinal product must undergo a specific safety assessment.

Asian regulators are also cracking down on unscrupulous manufacturers: the China FDA created a licensing system for higher-risk excipients based on toxicity and dosage data, for instance. The country’s top pharmaceutical regulators have established GMP requirements, which went into effect in 2013, and which are now in some ways even more rigorous than those prescribed by the International Pharmaceutical Excipients Council. But there are
still loopholes for some excipient exporters to the US and Europe.

These loopholes let unscrupulous manufacturers continue to exploit lax standards in the Asian market. While Europe is tightening its pharmaceutical borders in an attempt to prevent any change in the law, markets in other parts of the world are still awash with the abuse of excipients. Pharmaceutical companies in these markets might continue to grow apart in the short term, offering patients brief safety, but standards in drug production don’t seem to be closing yet.