NIPTE Justification

The Challenge
Prescription drugs are assuming an increasing role in healthcare spending by providing effective alternatives to expensive medical procedures and hospital stays. While in 1999 prescription drugs accounted for 8.2% of the total national health spending, that share is expected to reach 14% by 2010. However, the cost of bringing a new drug to the market place has been steadily increasing, with recent estimates projecting a required investment of nearly $2 billion to progress from laboratory idea to commercialization. As a result of these two trends, U.S. spending for prescription drugs has been projected to grow by 10.7% annually between 2004 and 2013. The cost of prescription drugs is a major expense for the elderly population and the taxpayers of this country – there is a national need to reduce the cost of medication.

Price of drugs is also a major concern in infectious disease management. Infectious diseases such as Multi-Drug Resistant Tuberculosis (MDR-TB), AIDS, Malaria, Avian Flu are treatable – but patients in the developing countries cannot afford the drugs required to treat these diseases, and there is untold suffering in the world due to non-availability of drugs for these diseases. Every year, there are 300,000 to 400,000 new cases of MDR-TB alone, but drugs are available only to treat up to 20,000 of these patients. Of the drugs available, the total therapy cost to treat MDR-TB is over $15,000. The U.S. cannot remain insulated from diseases that are prevalent in other parts of the world – cheaper ways to manufacture these critical drugs must be found.

NIPTE seeks to address these national and international challenges.

The Drivers
The pharmaceutical product pipeline consists of four major steps as shown below:

Considerable public attention as well as industry and government funding are directed to the discovery and clinical trials steps of the pipeline. For instance, the NIH's annual budget exceeds $28 billion and the pharmaceutical industry expends 20 percent of its $51 billion annual R&D budget on discovery. Discovery research is essential for the identification of new and improved therapies, but given its sophistication and complexity there is little scope for substantial cost reduction and thus impact on the price of new pharmaceutical products. Industry-wide discovery research budgets have remained at about 15 percent of sales for a number of years. Clinical trials are a mandatory part of the product development pipeline and constitute up to 30 percent of the cost of developing a new product, but rising concerns with product safety, especially identification of side effects, suggest that significant reduction in cost in this area are unlikely.

By contrast, although the cost of goods sold (COGS) for pharmaceutical products is estimated at upwards of 25 percent of sales, very little funding is devoted by industry or government to new science and engineering technology for reducing the costs associated with the development and manufacturing steps of the pipeline. The FDA has identified that new science and technology in product/process development and manufacturing are lagging substantially behind the tremendous advances in the basic sciences for discovery. A recent FDA-industry joint report suggests that world-wide cost savings from manufacturing improvements could be as high as $90 billion per year. Moreover, research conducted by NIPTE indicates that improvements in the science and engineering of product development alone could save an additional $5 to $7 billion in drug development cost in the US each year.

Yet, very little attention or research support is allocated by the federal government or any of its agencies for this purpose. The same methods and technologies used for decades remain in place, sustained by regulations that discourage taking the risks inherent to technological change. Industry is responding to pressures to reduce COGS largely by moving development and manufacturing offshore to take advantage of lower labor costs. Investment in research in new technology would make labor less of a factor, but it will also entail regulatory risk and require a suitably trained cadre of technologists. Given that research in pharmaceutical development and manufacturing at universities is limited, educational programs that would prepare the new generation of scientists and engineers well versed in such technologies are very limited. Thus an integrated program of research and education in new technologies for pharmaceutical development and manufacturing is essential to reduce drug cost as well as to retain US leadership and the high quality jobs provided by this industry.

The Goals
The research and educational goals of NIPTE will target technical innovation in the development and manufacturing steps of the product development pipeline. To that end NIPTE will:

1. Develop science based understanding of pharmaceutical materials, their processing characteristics and their performance in the field.
2. Create the engineering tools needed to develop, design and scale up cost effective processes for the manufacturing of active pharmaceutical ingredients.
3. Develop model-predictive approaches for drug product formulation and manufacturing process design.
4. Create novel manufacturing technologies that allow flexible and cost effective manufacturing of multiple products in the same production line, to replace current dedicated, largely batch-wise operated lines.
5. Invent and demonstrate new sensing and control technologies that allow critical product and process variables to be monitored continuously and controlled automatically, dramatically reducing current, wasteful reliance on quality control via end of production testing and off-spec rejection.
6. Create and deliver educational and training programs that will prepare the technical cadre needed by the industry and the FDA to implement and regulate these new technologies.

NIPTE Research Projects & Estimated Cost
The Pharmaceutical Technology and Education Enhancement Act would authorize the FDA to invest up to $25 million per year on qualified activities. On average, this funding level would support up to seventy (70) multi-disciplinary, peer-reviewed projects every year at universities in this country. The NIPTE Scientific Advisory Board, consisting of several independent distinguished scientists from academia, government and the industry, will help identify and define specific areas of research needs that will meet the bill's overall research objectives. Both NIPTE and non-NIPTE institutions in the U.S. will be eligible to submit research proposals and join in an open competition for most of these funds. Research grants will be peer-reviewed by one or more separate review panels, consisting of a mix of industrial, academic and FDA experts in the field covered by the Request for Proposals (RFPs).

Most of these projects are expected to be longer term in nature and thus, three to five years in duration. A typical project team will consist of two (2) faculty members and four (4) graduate students. Assuming the all-inclusive cost of a graduate student at $50,000 per year and the all-inclusive part-time cost of a faculty member at $50,000 per year, each project cost is estimated to be approximately $300,000 per year.

Proposed Budget Distribution
NIPTE seeks sustained funding at the level of $25 million per year to carry-out the proposed research program in pharmaceutical development and manufacturing and to train a cadre of technologists for industry and the FDA. NIPTE partner institutions will be able to graduate 100 MS and PhD students per year and retrain up to 300 industrial technologists per year as MS pharmaceutical engineers. The budget distribution discussed in more detail below is designed to support these research and human resource goals.

• Research Infrastructure 20% - Funds are allocated for partial salary support for NIPTE faculty and staff, although the bulk of their academic year salary will come from their respective universities. In addition to leveraging existing faculty expertise, these funds will also support the start-up and development of new faculty who are essential to sustain and grow teaching and research in this domain in US academia. Additionally, funds will be used to acquire new equipment to supplement and modernize the existing substantial laboratory and pilot plant facilities of the partners. Faculty and student travel to meetings and conferences will also be a part of the infrastructure funds.


• Research Students 60% – This budget segment funds the core research activities while concurrently funding the education of graduate students in pharmaceutical technology who will be the change agents for the industry. 100 M.S. and Ph.D. university students per year will be trained by NIPTE institutions with the requested resources supplemented by those leveraged by our institutions.


• Education 10% – The supported activities will include the creation of new courses for educating both university students and industrial scientists to bring them up to the new “desired state” of pharmaceutical technology. The course work would be used for both resident university students as well as up to 300 industrial and FDA scientists per year who would complete M.S. degrees. The fees from the industrial practitioners would provide supplemental support for executing the program.


• Administration 10% – Central administration of this cooperative effort will involve effective coordination of the activities of the 11 partner institutions and their associated researchers. This includes insuring the equitable and rigorous stewardship of funds, management of course development and training programs as well as interfacing with FDA and advisory bodies.

This budget is designed to produce timely progress to our goals of modernization and advancement of pharmaceutical development and manufacture in the U.S. The NIPTE organization and its partner institutions are uniquely positioned to succeed by virtue of existing technical strengths in pharmaceutical engineering and science.