Five minutes at DCAT with …
Dr. Thomas Hein, Vice President – Commercial & Regulatory Affairs at HERMES PHARMA
HERMES is a mid-sized, family-owned pharmaceutical company. One division sells and markets its own over-the-counter brands, notably vitamins and minerals, while the other division, HERMES PHARMA, develops and manufactures user-friendly oral dosage forms for third parties. The company has two production sites, one in Germany and one in Austria, and manufactures over 50% of all effervescent medicinal products for the German market.
PH: Please describe the HERMES PHARMA business model.
Hein: We started manufacturing our own brands in the 1970s. Since the 1980s, we have used spare capacity to supply third parties. We are a “one-stop-shop” providing all services along on the pharmaceutical value chain from new product development and formulation design, to analytical testing and regulatory services, manufacturing and logistics. Sometimes we create new product concepts and then look for a licensing partner who brings it to market; in other cases our customers have already a more or less precise product idea and we develop and manufacture it for them. Our third party business now accounts for about €120 million of our €170 million in annual revenue.
PH: How do you collaborate with customers on product development?
Hein: We often co-develop new products together with customers. We meet regularly and look at their portfolio. Then we might propose line extensions, or, knowing our capabilities, they might ask us for, say, a chewable tablet containing a specific API or combination of them. Then we would develop the formulation and analytical methods, the documentation and sometimes also do the registration. We also have a portfolio of existing products with registrations available for certain countries, so customers could ask us for, say, acetylsalicylic acid in a chewable form. Sometimes clients, especially in the generics industry, want a copy of one of our own Hermes brands. Pure contract manufacturing is only a minor part of our business.
PH: User-friendly dosage forms are a big part of the HERMES PHARMA offer. What do you mean by the term?
Hein: We produce under the claim ‘Get the Dose Right’. We are experts in developing and manufacturing user-friendly dosage forms. We started 40 years ago, with effervescent tablets, then chewable tablets, instant drinks in sachets and lozenges. Hermes was one of the first companies bringing orally disintegrating granules to the healthcare market. We launched our first product, Biolectra Magnesium Direct, for direct oral application in stick packs in 2004, the same year that Bayer launched aspirin in that form. No-one knew how to use it then, so we had to add pictures to the packaging to explain! Now it is our fastest growing dosage form and every second year we buy new high-throughput equipment to fulfil the growing demand of our customers.
User-friendly dosage forms taste well, are easy to swallow and convenient to take. You can also incorporate large amounts of an API – such as 1,000 mg of paracetamol – for example, in one instant drink. You simply dissolve the powder usually packaged in a sachet in water and drink it. That would be difficult with a conventional tablet which would need to be huge in size in order to contain that amount of API. In addition, many people face severe problems swallowing tablets. Ease of ingestion results in higher compliance, so these dosage forms are suitable for prescription drugs as well as OTC.
PH: This is your first time at DCAT Week…
Hein: We hesitated about coming to DCAT because most companies here are in the generics industry. Effervescents, for example, struggle to compete because the dosage form and its packaging in tubes or strip foil make them more expensive. Patients with chronic diseases for example benefit from such user-friendly dosage forms as they are easy to swallow, taste well and offer choice and convenience. Thus they improve compliance leading to better health outcomes.
Branded generics are becoming increasingly important and major generics companies have their own brands: Mylan bought Meda and Teva bought Actavis to get access to brands, for example, while Sandoz has brands like ACC.