The Future of Specialty Medicine

In a video interview with Pharma Commerce, Paul Levesque, CEO of Theratechnologies, explains how Theratechnologies' operations have been impacted by recent US tariffs on Canadian goods, especially concerning the manufacturing and supply chain for its HIV therapy, EGRIFTA SV. The active ingredients used in EGRIFTA SV come from the US, travel to Canada for additional processing, and then return to the US for final assembly. As a result, the company faces tariffs on both the raw materials and parts of the manufacturing process that cross the US-Canada border. While the tariffs will increase costs, the company benefits slightly since the tariffs are applied to raw materials and intermediate steps, rather than the fully finished product, which would have resulted in a higher cost increase.

Theratechnologies is currently assessing the full impact of these tariffs on its supply chain, including effects on insurers, governments, and patients. Despite these challenges, the company remains committed to ensuring timely delivery of its therapies to patients, managing the increased costs as best as possible.

Levesgque also comments on the forecasted obstacles regarding the availability of specialty medicines for US patients; making the decision to reshore manufacturing processes; and much more.

A transcript of his conversation with PC can be found below.

Note: The FDA approved the company’s supplemental Biologics License Application (sBLA) for the F8 formulation of tesamorelin for injection on March 25. The new formulation will be commercialized under the tradename EGRIFTA WR and is expected to EGRIFTA SV.

PC: What obstacles do you foresee regarding the availability of specialty medicines for US patients—as a result of supply chain challenges—and how can biopharma companies address these issues?

Levesque: First of all, the easiest solution is to produce everything in the US. It just so happens that EGRIFTA SV will transition to a new formulation that we believe will be approved by the end of this month, and that will be entirely manufactured in the US. It just so happened that in our case, at this juncture, we have a relatively short-term solution coming up whereby, we're not going to have this situation that I've described, where components are crossing the border several times.

This being said, I think that any company that would like to actually get such a strategy forward at this time would actually encounter many difficulties, because it takes time to actually select a CDMO, a manufacturing facility that is qualified that can do something for you. It takes a lot of time. Our economies—especially in Canada and the US—are intertwined, and our plants in Canada are FDA-approved. If you try to do this in a short period of time, fyou're going to have to face complexity, but second of all, you're not sure that you're going to be able to produce the same thing in the US at the same cost.

Often, the manufacturing facilities in Canada and elsewhere were set up because they could do quality work, but at a lower cost, so that's going to be really challenging. I think that this is why many companies, especially biotechs, may actually be vulnerable to this phase of uncertainty, because they don't have the same cash position as Big Pharma, and yet, they account for a lot, if not the vast majority, of innovation. This definitely creates a lot of challenges.