Hospira intent on growing Indian ops as EU market beckons

Hospira eyes East to lower price of goods, in light of remediation

Increased in-house API production and manufacturing in India will lower the costs of Hospira’s injectables, the firm says, as it looks past current remediation efforts.

In December, in-Pharmatechnologist.com reported on Hospira’s intention on increasing its in-house active pharmaceutical ingredient production from 10 to 50% by 2018, with its impending acquisition of Indian manufacturer Orchid and further inorganic growth.

At the time the firm spoke of how this would lower the overall cost of its injectables, a statement reiterated at last week’s JP Morgan Healthcare Conference by CEO Michael Ball who told investors API integration would help increase profit margins following recent remediation efforts.

Rocky Remediation

Hospira has received a number of warnings and 483s from the US Food and Drug Administration (FDA) at several of its facilities, but the Rocky Mount, North Carolina injectables plant is most notorious with operations being voluntarily suspended in 2012 to deal with the GMP issues and capacity slowly ramped up since. Successful re-inspection is a key milestone for 2014-5, according to Ball.

“We’ve been spending obviously a lot of time money and effort [in remediation] but it’s not the only thing we’ve been doing,” Ball said, adding: “We’ve been investing heavily in the future so that we have the drivers of growth available to us as we emerge from this remediation.”

Indian manufacturing

On top of API incorporation, Hospira is looking to shift its specialty injectable pharmaceutical (SIP) manufacturing Eastwards, bolstered by its new 1.1m sq ft manufacturing site in Vizag, India, set to begin production at the end of this year.

This will include, Ball said, expanding its other Indian facilities including the beta-lactum IKKT plant – also hit by a Warning Letter last year – and adding a number of lines at its ZHOPL joint venture with Zydus facility.

 “If you look at our manufacturing footprint right now in the US, we only manufacture about 10% of our units outside the US,” Ball explained. “With the initiatives we have in place, we are driving to get to a number more like 40-50% of our units by 2018 manufactured outside the US, and I think this should have a profound effect on our cost profile.”

European Opportunities

Moving operations to India will place Hospira’s products in “a very good cost of goods position,” said Ball, and would coincide with attempts by the firm to spread its speciality injectable pharmaceuticals (SIP) business into the European market.

Whilst the EU is leading the way for Hospira’s biosimilar programme, for the SIP business it is relatively unpenetrated. “In 2012, SIP net sales as a percentage of total 2012 net SIP sales was 12.4% for Europe versus 77.5% for the Americas,” spokesperson Tareta Adams told this publication.

Therefore the firm has been proactively targeting the EU market by exceeding the expected 200 product submissions to the EMA in 2012/3.

With an 18-36 month approval process, Ball told investors the products were looking to be approved by 2015/6. “The idea is to put in huge critical mass of submissions, seeing the bulk of these come through in the 15,16,17 timeframe which coincidentally is when our Vizag plant comes online.”

This article was updated from its original title "Hospira Intent on Shifting Ops to India as EU Market Beckons" in order to clarify Hospira still intends to manufacture from the US.

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