Balancing Act - Regulatory hurdles and product quality are not just challenges reserved for speciality chemical companies; chemical distributors must also adhere to the highest standards of safety and security as well. The requirements and expectations chemical companies have on their distributors have grown and become more complex over the last several years. Azelis is one such distributor active in the distribution of speciality chemicals, representing many of the industry's top manufacturers of APIs and excipients.
Brandi Schuster from CHEManager Europe spoke to Matthew Dickman, the company's international business director for pharma, on how Azelis manages regulatory issues across borders and how it does business in China.
CHEManager Europe: APIs are becoming more and more regulated throughout the world. What measures does Azelis take to ensure API quality? What role does a distributor play in ensuring drug safety?
Matthew Dickman: There is no distinction between a distributor and any other type of supplier of APIs with regards to drug safety and regulation for pharmaceutical applications. Safety and security of supply is paramount, as is compliance with the relevant global regulations. Azelis maintains six EU member sites that are fully licensed to import and distribute APIs. Each site follows the relevant national regulations as published by the EU directives and transposed into national regulations of each member state.
As an additional check, all pharma regulations are frequently monitored by our corporate regulatory affairs team led by Dr. Christoph Sonntag, qualified person (QP), and any amendments forwarded to our different Azelis sites. We have diverse narcotic licenses and have specially secured stores for narcotics and other controlled drug substances.
Each site runs a qualification procedure for every distributed substance that includes the necessary GMP and written confirmation packages, the existence of a certificate of suitability, an active substance master file or at least a technical data package.
Quality assurance agreements are discussed and signed between Azelis and its manufacturing partners. A GMP-according complaint and corrective and preventative action system is maintained to support all customers in cases of quality related complaints, including batch traceability. As an additional service, we also offer GMP controlled repacking of APIs into small lots in a class D clean room area under laminar flow. We are finding that there is an increase in demand for this type of service.
And last but not least, Azelis regularly invites customers to audit any of our pharma sites.
How often do such audits take place?
Matthew Dickman: These days our customers audit our facilities more and more, all across Europe. Typically we have one or two customer audits per month in each location.
Excipients are not (yet) as stringently regulated as APIs; does Azelis undertake any voluntary measures to ensure the quality of these products?
Matthew Dickman: Yes; much of what we do for APIs can also be applied to the excipients we offer. Azelis supplies excipients and ancillary products into the veterinary and medical sectors as well as into pharmaceuticals, so we take extra precautions to ensure that the customers who need to qualify every ingredient used in their manufacturing can be sure that Azelis will give them every possible support to enable secure and safe compliance.
Our customers expect this of us, as many of our partners to whom we supply APIs also purchase excipients from us. They expect - and we deliver - high standards of regulatory compliance throughout the supply chain process.
How does an international distributor such as Azelis manage staying in line with the myriad different regulations throughout the world?
Matthew Dickman: While at first glance it seems like there is a jungle of regulations out there, a more detailed examination reveals that the majority of regulations originating from large, well-regulated territories such the EU and the U.S. are often covered by internationally acknowledged regulatory systems. One example of this is ICH, the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use. It covers the U.S., the EU and Japan, but it is also commonly accepted in many other regulated territories. In practice, this means that the high number of different regulations can be drilled down to a much smaller number that are more or less identically valid in many territories. A good example of this is ICH Q7, the globally accepted GMP regulation for API manufacturing; in the EU also known as EU GMP, Part II.
How do you stay up-to-date on changes to regulations?
Matthew Dickman: We keep abreast of any legislation changes via our Azelis regulatory affairs experts, who regularly screen the publication of new or revised international regulations. In addition our offices in China, India, Canada and Australia provide Azelis with new and revised regulations valid in their territories. Regulatory affairs knowledge is shared across all Azelis pharma sites on the Azelis intranet, guaranteeing that all sites are permanently on an identical, high-level of international regulatory affairs knowledge. Each individual site thereafter simply needs to cross-check the relevance and transfer into corresponding national regulations. In addition, Azelis also shares its regulatory affairs knowledge with its business partners.
Since July 1, the EU Falsified Medicines Directive has required that APIs imported into the EU must be accompanied by written confirmations of quality by the regulatory body from the country of origin, have a valid EU GMP certificate or come from a country listed by the EU commission. Has this affected your business?
Matthew Dickman: Azelis began one year before the effective date of the EU Falsified Medicines Directive to comprehensively and frequently inform all of our API manufacturing partners located outside the European economic area (EEA) about this directive and its legal consequences for API importation into the EU/EEA. Supported by this comprehensive information, all of our API manufacturing partners contacted their competent authorities in advance to get the needed written confirmations as soon as possible.
All received written confirmations are uploaded on the Azelis intranet and are therefore accessible for all API selling entities within the company. As it stands today, Azelis is in possession of more than 250 written confirmations and the number is still increasing on a daily base.
By this proactive approach, Azelis' API importation business has not been affected so far.
Azelis recently opened a third office in China. What are your company's specific plans for expansion in Asia, particularly in the pharma sector?
Matthew Dickman: We see China as a very important growth market for our distribution business. We are looking to expand our operations from mainly sourcing APIs from Asia for sale into European markets and moving into sales of pharma excipients into Asia. By using our connectivity with our existing European partners, we plan to offer their materials into Asia Pacific, initially in China, India and Japan, with three or four new distribution centres in more countries to follow within the next two years. We also intend to open more offices in India to enhance our local presence and improve our supply connectivity to customers there.
We have a clear-cut strategy to grow our business in Asia and are actively talking to principals who are looking to grow their business in that region. Right now, a number of our key European partners have signalled a desire to have their Chinese business managed in line with their European experiences and expectations.
What does business in China typically look like for your customers, then?
Matthew Dickman: In the past, they have used a number of local distributors, where the main aspects of the business are focused on short-term profitability, not on opportunities and growth. This is where we bring in value-added service for our suppliers and principals in China. Essentially, we are working with our existing European customers to either establish a platform for them in China or to develop their existing platform.
Where do you see the most potential right now in the Chinese pharma market?
Matthew Dickman: Selling APIs in China is not such a common or easy thing to do due to the amount of raw materials that are made in China. It's a different story with excipients. We have seen an increasing demand for value-added excipients in China, particularly to those companies who are formulating for the European or U.S. markets. This is going to become more common moving forward. There is a demand for the distribution of value-added excipients in China, and our intention is to provide a value-added service which mimics what we do in Europe.
What role do joint ventures/co-operations play for expanding in Asia?
Matthew Dickman: Existing principal mandates from our European partners is an important pillar of our market strategy here. Our customers in Asia are asking us to provide a complete portfolio of specialties from first-class manufacturers so they can improve product safety for their domestic markets and deliver superior end product performance. Our own independent research has indicated that the markets we are targeting in Asia are more than ready for the specialist products Azelis can provide.
How does Azelis address supply chain safety issues in Asia?
Matthew Dickman: Azelis has a long history in the secure sourcing and supply of APIs from China for importation into European markets from our offices in Shanghai, initially into Spain and Germany and now across all of Europe, Australia and Canada. As a result, we already have well-established pharma partners in China and are well versed in handling supply chain and safety issues, coupled with transparency and correct documentation. Logistically, we use tried and tested carriers who are preselected for their ability to transport controlled substances safely and in accordance with all legal requirements.
What other regions of the world play an important role for your pharma business?
Matthew Dickman: Other regions that play an important role in our business include Russia, Eastern European countries such as the Ukraine, Bulgaria and Romania as well as in the more established markets in Spain, Germany, UK, France and Italy.
What about Latin America or other geographies?
Matthew Dickman: We have a strategic intent that sets out what we want to accomplish and where we want to go. Definitely we plan to increase our geographic footprint. Currently we see Latin America as an attractive economy but also a market where there are many players. The same applies to the U.S., so these are not regions we have on the immediate agenda, but are on the horizon. After Asia we are considering a move into Africa, we are evaluating whether it makes sense for us and our partners to be represented in countries like Angola, Kenya and Nigeria where we have seen good growth in the last couple of years.
Interview courtesy of http://www.chemanager-online.com/en/topics/chemicals-distribution/art-adding-value