Pharmaceutical Formulation Intermediates vs Active Pharmaceutical Ingredients: What Should Drug Manufacturers Prefer?

A Pharmaceutical Formulation Intermediate (or PFI) is a blend of active substances and excipients, oftentimes in a powdered form. An Active Pharmaceutical Ingredient (or API), on the other hand, is the active component of the drug that acts on the symptoms of a disease. APIs work in coordination with inactive ingredients, which have no direct effect in healing one’s health condition, but are necessary for its production. For instance, dye is an example of an inactive ingredient as it doesn’t heal the body but is used in a pill to lend it a certain color.

API refers to the key ingredient or chemical that makes the drug work. While a finished formulation or a formulation intermediate is the process in which different chemicals including the active ingredients are mixed in specific ratios to produce a specific drug.If you consider the example of a Paracetamol 500mg tablet, the API or the active component is the 500mg of paracetamol. However, in addition to Paracetamol, the tablet may also contain some colorants, fillers, preservatives, binders, etc. These other ingredients include maize, starch, stearic acid, soluble starch, povidone, etc. which are known as PFIs for their necessary production.

Understanding the legal part of things From the pharmaceutical management point of view, APIs must be registered with the Drug Regulatory Authority, according to the law, and synthesized in a GMP-compliant plant after obtaining the approval number.In general, both APIs and PFIs are manufactured by pharmaceutical companies in their home countries. But in recent years, many companies have chosen to shift their manufacturing overseas to reduce costs.

PFI or API – the challenger for a big pharma company?

A big pharmaceutical company generally deals with around 200 to 250 suppliers all over the world for its API formulation. Dealing with so many suppliers is challenging and expensive to run economically. Due to these differences in costs and time, along with hectic supply chain management, many API providers are buying finished formulation companies and vice-versa, resulting in cross consolidation. And it has also been noted that dealing with the core task of API cannot make it economically feasible due to high technical and testing costs.

Choosing to partner with an external vendor for PFIs is more profitable If giant drug manufacturers want to save on expenses to curb overspending, they might need to cut short the number of suppliers they work with. Especially in tough times like the Covid pandemic or any other unexpected events. However, if there is a cross consolidation between APIs and PFIs, in terms of supply chain management perspective, then they will not have to deal with multiple suppliers like earlier.

Moreover, many pharmaceutical companies are located in the UK and US, while most API and PFI manufacturers are located overseas. Because finished dosage manufacturers purchase APIs from suppliers and manufacture PFIs in-house, the cost incurred for its technical production is way high, increasing their testing costs as well. That said, drug manufacturers these days prefer purchasing PFIs from a specialized manufacturer, to reduce the cost and increase their RoI, so that they don’t have to make PFIs in-house and invest in machinery and manpower.

About ZIM Laboratories

ZIM Labs is an innovative drug delivery solution provider focusing on improving patient convenience and adherence to drug intake. We offer a range of technology-based drug delivery solutions and non-infringing proprietary manufacturing processes for the production and supply of innovative and differentiated generic pharmaceutical products to our customers globally. At ZIM Labs we provide our customers a comprehensive range of value-added solid dosage differentiated generic products in semi-finished and finished categories/formulations. These include granules, pellets (sustained, modified, extended-release), taste-masked powders, suspensions, tablets, capsules, and recently developed Oral Thin Films (OTF).


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