Strategic Use of
Drug Master Files by
Smaller Pharmaceutical
Companies
By Jamie Robinson
16
December 2010
Pharmaceutical companies undertake drug
development to bring a valuable product to
market and to provide returns to shareholders. As drug development proceeds, research
and development costs grow exponentially and
business risk progressively increases. Small to
mid-size pharmaceutical companies are, therefore, constantly looking for ways to attract
funding to reduce this risk. Funding is often
secured through various collaboration arrangements initiated and negotiated by a company’s
business development department and senior
management. In early negotiations, details such
as the existence of a Drug Master File (DMF) are
not necessarily considered. However, forwardthinking technical and regulatory leaders can
add real value to the final deal if they consider
how to manage their intellectual property (IP) in
advance, perhaps by use of a DMF, and may be
able to influence the deal at an early stage. This
article provides some food for thought about the
use of DMFs by small to mid-size pharmaceutical companies to strategically manage IP.
Business Strategies for Small
Pharmaceutical Companies
Typically, IP is the most valuable asset held by a
small to mid-size pharmaceutical organization,
representing as much as 90% of the market value
of many small companies.1 IP can consist of the
molecular structure of a new compound, the
synthetic process used to create the compound,
a novel manufacturing technology or any combination of these and other proprietary information
and assets, including trade secrets, trademarks
and copyrights. The business strategy of the
company should aim to maximize the value of
this IP for shareholders.
Companies file patents to obtain legal protection for these valuable assets. Patents are very
costly. Initial filing costs can range from $5,000
to $25,000, plus expenditures for prosecution of
patent infringements and ongoing maintenance.
Multi-region filings can add hundreds of thousands of dollars in patent costs.
One strategy that smaller pharmaceutical
companies can use to obtain a return on their
investments in IP is to enter into collaboration arrangements, such as research alliances,
co-development agreements, in-licensing and
out-licensing, which provide additional funding
for development and therefore lessen the overall
business risk.
Out-licensing an asset, where rights to the
asset are granted to another company in return
for payment, is a common strategy for smaller
pharmaceutical companies developing new
molecular entities (NMEs). A study conducted by
IBM in 2003 showed that NMEs represented 80%
of the assets licensed in out-licensing deals.2 Outlicensing is a good strategy for companies with
a strong position in a certain technology area
but without the complementary resources and/
or internal expertise necessary to exploit that
technology. Out-licensing and other collaboration
arrangements allow a smaller pharmaceutical
company to utilize external resources for the further development of its products.
Drug Master Files
A Drug Master File is an optional regulatory
submission that may be used to provide information to a regulatory authority about specific
components, processes or facilities used to
produce drug substances or products, while
keeping the information confidential from other
corporate entities. DMFs are accepted in the
US, Canada and the EU (where they are known
as Active Substance Master Files, or ASMFs).
Each region has different regulations regarding
what subjects may be included in the filing. The
US, for example, allows information regarding
sterile manufacturing plants and excipients to
be filed, whereas only drug substance information may be filed in Europe. Information filed
in one region via a DMF may not be referenced
in a submission filed in a different region; for
example, a Canadian New Drug Submission may
not make reference to a US DMF.
In the US, DMFs are governed by the
Guideline for Drug Master Files issued in
September 1989.3 As this guideline is now more
than 20 years old, much of the information is no
longer current (for example, there is no provision made for electronic submissions). Current
information about the submission of DMFs,
along with a listing of all DMFs, is provided
on the FDA webpage, which is updated quarterly.4 The information posted on this webpage
must be carefully reviewed each quarter, as it is
frequently revised. US DMFs allow the widest
range of information of the three regions covered
in this article. Four DMF types are available:
drug substances, drug substance intermediates
and materials used in their preparation, or drug
products (Type II); packaging materials (Type
III); excipients, colorants, flavors, essences or
materials used in their preparation (Type IV);
and information relating to sterile manufacturing
plants or to contract facilities for the manufacture
of biotech products (Type V). A fifth type, Type I,
is no longer accepted by FDA.5
Canadian DMFs follow the draft guidance
Drug Master Files (DMFs), which was issued for
comment in August 2008 and has not yet been
officially adopted.6 Canada is the only region
requiring a fee for filing. The fees are minimal
and have not changed since 1996: $350 CDN for
registration of the original DMF and $50 for each
Letter of Access.7 Canada also has four types of
DMFs: drug substances or intermediates in the
production of drug substances (Type I); container
closure systems and components (Type II); excipients (Type III); and dosage forms (Type IV).
The European ASMF may be filed either with
individual national Competent Authorities or,
Regulatory Focus
17
if supporting a marketing authorization under
the Centralised Procedure, with the European
Medicines Agency (EMA). In either case, only
information regarding the active substance may be
submitted, and the ASMF must be directly linked
to (and submitted in parallel with) a marketing
application. Information regarding the content of
an ASMF is provided in the Guideline on Active
Substance Master File Procedure; consultation on
revision 2 of this guideline ended in August 2006
but the updated guideline is not yet finalized.8
for maintaining the DMF and filing required
updates. This strategy also provides more flexibility to the innovator in case future contract
manufacturing site changes are needed, since it
holds the regulatory information.
In another situation, Company A may hold
the IP for a drug substance process that supplies
multiple products, perhaps different formulations and/or different indications. If one or more
of those products is a candidate for out-licensing
(or for another type of collaboration arrangement) with one or more Companies (B, C, etc.),
Company A can negotiate an arrangement under
which it continues to hold the DMF. Then if
Companies B, C, etc. are using the drug substance manufactured under the DMF, Company
A can retain regulatory control over changes,
keep the IP confidential and ensure that its inhouse programs remain compliant.
Conclusion
Strategic Use of a DMF
DMFs are typically filed by manufacturers rather
than sponsors, as the manufacturer usually
has some IP that it wants to keep confidential.
Why, then, would a sponsor consider holding a
DMF? Why not simply transfer the regulatory
burden to the manufacturer? The reason is that
a DMF allows a sponsor to retain a measure of
regulatory control over the subject matter of the
DMF, as well as an option to keep key technical
information confidential. Therefore, DMFs can
be used strategically by sponsors if they hold
the manufacturing IP themselves. This strategic
advantage can be realized when the sponsor
enters a collaborative arrangement.
For example, if the agreement requires technical information to be disclosed, negotiating for
the sponsor to continue to hold the DMF allows
the innovator/sponsor to retain regulatory oversight. The sponsor, therefore, retains involvement
in and some control over future development of
the product, including control over changes to
the product or process. The existence of one or
more DMFs and related responsibilities must be
accounted for in the agreement governing the
collaboration to ensure information is fully available to meet all regulatory requirements.
Consider the case where a small pharmaceutical company has invented a manufacturing
process but does not have the capability to manufacture on a commercial scale. The company
elects to contract manufacturing out to a third
party. In this case the innovator company could
choose to file a DMF for the manufacturing process, rather than have the contract manufacturer
file one. This strategy provides the innovator company regulatory control over the IP: it
must be informed of all changes made by the
contract manufacturer because it is responsible
18
December 2010
Drug Master Files are a type of regulatory filing that can be used strategically by a small
to mid-size pharmaceutical company to retain
regulatory control over and to maintain confidentiality of IP when coupled with appropriate
contractual arrangements. Companies should
consider filing a DMF when looking to gain
third-party funding for drug development projects via collaboration arrangements.
References
1. Berman B, ed. Making Innovation Pay: People Who Turn IP
into Shareholder Value. 1st ed. Hoboken, NJ: John Wiley &
Sons, Inc.; 2006.
2. Reepmeyer G. Risk Sharing in the Pharmaceutical Industry:
The case of Out-licensing. Contributions to Management
Science. Springer; 2006.
3. Guideline for Drug Master Files. FDA website. www.
fda.gov/Drugs/DevelopmentApprovalProcess/
FormsSubmissionRequirements/DrugMasterFilesDMFs/
ucm073164.htm. Accessed 14 April 2010.
4. Drug Master Files (DMFs). FDA website. www.
fda.gov/Drugs/DevelopmentApprovalProcess/
FormsSubmissionRequirements/DrugMasterFilesDMFs/
default.htm. Updated 29 January 2010. Accessed 14 April
2010.
5. Federal Register Vol. 65, No. 8. Government Printing Office
website. http://www.gpo.gov/fdsys/pkg/FR-2000-01-12/
pdf/00-648.pdf. Accessed 28 April 2010.
6. Drug Master Files (DMFs). Health Canada website. www.
hc-sc.gc.ca/dhp-mps/prodpharma/applic-demande/
guide-ld/chem/draft_ebauche_dmf_fmm_guide_ld-eng.
php. Accessed 14 April 2010.
7. Drug Master File Fees. Health Canada website. www.
hc-sc.gc.ca/dhp-mps/prodpharma/fees-frais/dmfcost_
fmmfrais-eng.php. Accessed 14 April 2010.
8. Guideline on Active Substance Master File Procedure.
EMA website. www.ema.europa.eu/pdfs/human/
qwp/022702en.pdf. Accessed 14 April 2010.
Author
Jamie Robinson is manager, CMC regulatory affairs for
Cardiome Pharma Corp., with responsibility for all aspects
of CMC submissions to support worldwide clinical trials and
marketing applications. She is also a founding member of the
Southern BC Chapter of RAPS and currently serves as the program chair of the chapter.
The author wishes to thank Taryn Boivin for her invaluable contributions to this article.