By Andrew Turley, European Correspondent for DCAT Value Chain Insights (VCI)
A key upcoming deadline in 2018 for registration under the REACH regulation will impact pharmaceutical companies, fine chemical companies, and contract manufacturers importing or manufacturing chemical substances into the European Union (EU). So what do companies need to know? DCAT Value Chain Insights (VCI) examines the key issues.
| Andrew Turley
REACH concerns the registration, evaluation, authorization and restriction of chemicals for all chemical substances manufactured in or imported into the EU, with some exemptions. Phased in over a 10-year period beginning in 2007, upcoming requirements of REACH, due in 2018, will impact lower-volume chemicals, such as intermediates, used in pharmaceutical development and production. DCAT Value Chain Insights (VCI) examines the impact on the pharmaceutical manufacturing value chain.
The REACH regulation, enacted in 2007 in the EU, is one of the most ambitious piece of chemicals legislation ever implemented. The REACH regulation, generally referred to as simply “REACH,” concerns the registration, evaluation, authorization, and restriction of chemicals for all chemical substances manufactured in or imported into the EU, with some exemptions. The purpose was to improve the protection of human health and the environment from the risks posed by chemical substances. Phased in over a 10-year period following its enactment in 2007, the regulation has altered the way chemical hazard data are produced and disseminated. Companies must give the European Chemicals Agency (ECHA), the agency formed to implement REACH, detailed information about their substances and the risks they might pose before marketing them. Significantly for the pharmaceutical sector, medicinal products for human or veterinary use, including the finished medicinal product, the active pharmaceutical ingredient, and any excipients, are exempt from REACH requirements. The exemptions do not, however, extend to intermediates used in the production of pharmaceutical ingredients, and an upcoming registration requirement in 2018 for chemicals produced in smaller volumes, typical for those used in pharmaceutical production, has fine chemical companies, contract manufacturers, and pharmaceutical companies attuned to the upcoming requirements.
A REACH debriefing
When REACH came into force in 2007, policy makers made some allowance for the large number of registrations the regulation would entail and the time the dossiers would take to prepare. Thus, the regulation divides those substances into two groups and treats them differently. The “no data, no market” principle applied immediately for new, “non-phase-in” substances. Companies wishing to manufacture or import such substances had to submit a registration dossier and have it accepted by ECHA before doing so. Substances already manufactured or imported, “phase-in” substances, were subject to pre-registration in 2008. Pre-registration was intended to be a simple affair by merely notifying ECHA of the intention to register fully later. Companies wishing to continue to manufacture or import these substances were then required to submit registration dossiers in three tranches. The first trance, to be submitted by November 30, 2010, concerned phase-in substances manufactured or imported in quantities exceeding 1000 tonnes (note: tonne is used in this article to denote 1000 kg) per year, plus some substances manufactured or imported in lower quantities but of high concern with respect to human health or the environment. The second, to be submitted by May 31, 2013, concerned phase-in substances manufactured or imported in quantities of 100 to 1000 tonnes per year. The final, to be submitted by May 31, 2018, will concern phase-in substances manufactured or imported in quantities of 1 to 100 tonnes per year.
To avoid the duplication of work, REACH incorporates a range of exemptions to ensure that it does not apply where substances are adequately controlled by other legislative or regulatory instruments, and the pharmaceutical industry has benefited from several of these exemptions. Substances used in scientific research and development (SR&D), in quantities of less than 1 tonne per year, are exempt from several aspects of REACH, including registration. Additionally, substances manufactured or imported in quantities exceeding 1 tonne per year are exempt when they are used in product and process orientated research and development (PPORD).
“This PPORD exemption is limited to a specified time and to listed customers,” an ECHA spokesperson explains. However, it may be extended by a further, specified period if justified. “The scope of the PPORD definition is very wide, and it includes any development and testing of a substance or use of a substance to generate information for example to develop new substances.”
REACH requirements for intermediates
Since medicinal products for human or veterinary use, including the finished medicinal product, the active pharmaceutical ingredient, and any excipients, are exempt from REACH requirements, the focus for pharmaceutical companies and their suppliers is on intermediates since the exemptions do not extend to intermediates used in the production of pharmaceutical ingredients. Jo Lloyd, a partner at the London-based environmental consultancy, ERM, expects many of the substances registered for the 2018 deadline to be “one-off” intermediates used exclusively in the pharmaceutical industry. Furthermore, companies may not yet have woken up to the challenge. “I think in the pharma industry generally there’s a lack of appreciation that intermediates need to be registered,” she adds.
Sandra Meijer, director of business development at the UK consultancy, The REACH Centre, agrees: “A common misunderstanding often arises around intermediates,” she says. The requirement to state intermediates in applications for marketing authorizations may lead companies to wrongly assume those intermediates are also exempt from REACH. “To clarify, only ingredients that are actually contained in the final medicinal product are exempt,” she says. “Since intermediates, by their very nature, are not themselves present in the medicinal product, they are not exempt from registration.”
Lloyd is currently working on registration with some of the larger companies, which are, she says, generally are well prepared. The task they face is one of “filling in the gap.” Furthermore, they are likely to have had some experience of REACH already through registrations submitted for the 2010 and 2013 deadlines.
REACH and contract manufacturers
Contract manufacturers and fine chemical companies tasked with fulfilling specific sections of the manufacturing process, however, could be in quite a different situation. Such manufacturers are likely to be smaller and consequently less able to absorb the costs associated with REACH preparedness work. They may also be less experienced, having not been involved with REACH since pre-registration in 2008 as a consequence of only dealing with relatively small quantities.
There are also some quite specific challenges, Lloyd says. By its very nature, a contract manufacturer typically does not possess the intellectual property for the finished active pharmaceutical ingredient, which is typically held by the client company. This means that contract manufacturers and fine chemical companies may struggle to obtain the information about use required to complete the registrations.
REACH is explicit, however: the liability resides with the manufacturer of the chemical substance subject to registration. That liability could be quite extensive, given that one contract manufacturer may deal with hundreds of substances. If they have not passed on this liability through their contracts, they may face high costs associated with registration for the 2018 deadline.
Preparing for 2018
The message from ECHA is clear: start preparing now. Companies that have not been involved since pre-registration in 2008 may find that their inventories have changed significantly since then, resulting in them being out of compliance with respect to the 100–1000 tonne and over 1000 tonne substance categories before they even consider the 1–100 tonne substances for the 2018 deadline.
Additionally, registrants are required to organize themselves into groups known as substance information exchange fora (SIEFs). Each SIEF will then submit a registration that covers all its members, via the “lead registrant,” responsible for organization and administration. This approach is challenging because it requires competitor companies to work together extensively, raising a range of intellectual property, confidentiality, and competitiveness law issues.
A lot of the registrations for the 2018 deadline will be for “one-off” substances, used by just one company. As a result, many of the SIEFs will have just one registrant, which will be by default the lead registrant as well. In some ways, this may prove helpful as there will be none of the issues of communication between competitor companies. But in others, it is likely to make registration more of a challenge. There will, for example, be no opportunities to share the burden of data collection. Additionally, the lead registrant is far less likely to have experience of previous REACH registrations.
Strictly controlled conditions
Some pharmaceutical companies may be able to benefit from special rules applying to isolated intermediates manufactured, transported, and used exclusively under strictly controlled conditions (SCCs). It will be possible to register such substances with a “light” registration dossier that contains less data and should therefore be quicker and easier to prepare than the regular one, according to ECHA.
But those companies hoping to benefit from intermediates rule should ensure that they have properly understood the relevant definitions before committing to this approach. The concept of an intermediate is relatively straightforward: under REACH, an intermediate is a substance used in the manufacturing process but consumed or transformed into another substance and therefore not present in the final manufactured substance, according to ECHA.
In contrast, the concept of SCCs has been the subject of much intense debate. Lloyd says that the EU member states are now clear about what constitutes SCCs, but many companies may have a different interpretation. “It really does mean zero exposure to those handling the substance. A lot of people thought ‘well, if I’m just opening a tub, pouring it into something else, and then using it with local exhaust ventilation, that’s fine’ – but that isn’t what REACH says.” She believes that some of the companies that pre-registered believe that they would meet the definition will end up having to do much more for the 2018 deadline than they imagined.
Pete Walters, a technical advisor at REACHReady, a UK-based consultancy, agrees that those looking to register substances for the 2018 deadline should take action as early as possible. Early action should enable registrants to keep the impacts on their businesses to a minimum. It should allow them to beat the rush for the services of the testing laboratories, should they be required. He adds, however, that updates to the key pieces of software used in registration, REACH-IT and IUCLID (the International Uniform Chemical Information Database), both software packages used to submit registration dossiers, are scheduled for release in the second quarter of 2016. Given that these updates are intended to make the software more user-friendly, it might make sense for some to wait a few months before they begin to input the data, providing of course they are not under any immediate obligations.
Whether or not the pharmaceutical supply chain is heavily affected by the 2018 registration deadline remains to be seen; it is hard to predict how many registrations will come from each sector. But what is known is that it will be a big endeavor. ECHA expects to receive 70,000 registration dossiers from now until then, more than the number received since 2007 (44,000).