Artemisinin Logistics

Introduction

A major problem with using artemisinin to cure malaria has been the unreliable supply of the Artemisa annua plant. Aretimisia annua is the raw material for Artemisinin-based Combination Therapies (ACTs) and its attainment is the first step in the production of the drug. The unreliable supply of this plant and increasing demand for the treatment of chloroquine-resistant malaria are the reasons why innovations like artemisinin-producing engineered yeast have been developed and approved by the regulatory authorities. Artemisinin-producing yeast would make the supply chain more reliable.

We have analysed the artemisinin supply chain and how fluctuating cost prevents access to ACTs by the most disadvantaged sufferers of the disease. We also delved into the moral debate about applying synthetic biology on an industrial scale and what effect it may have in the future. With the first batches of semi-synthetic artemisinin only being shipped out during the second half of 2014 there has not been enough data to form an impression on any changes in artemisinin supply. However future projections have been done.

Supply and demand

Artemisinin has a history of unstable supply which lead to wildly varying prices. Because of the nature of the raw material – a plant native only to certain regions of China, the production of artemisinin-based drugs has to be planned 14 months prior to production so that it can follow the growth cycle of the plant. The farmers and local extractors have to rely on forecast data which sets the bar for the demand of artemisinin-based drugs. Although artemisinin has been discovered and developed since the 1970s and 1980s, it was only in April 2004 that the Global Fund announced that it would spend $200 million to implement the shift from chloroquine-based drugs to ACTs for treatment of malaria in qualified countries. Since the announcement was published after the planting season it led to a shortage of the active pharmaceutical ingredient (API) and a surge of price from $350 per kg to more than $1000 per kg of artemisinin.

This shortage resulted in overly optimistic predictions for the market and a boom in artemisinin producers in China with the number of companies extracting artemisinin jumping from 10 to 80 between 2003 and 2005 and the number of API producers increased from three in 2004 to more than one hundred in 2006. By 2007, 200 million tonnes of artemisinin were produced. The artemisinin market burst and the price took a free fall to around $200 per kg. The 100+ companies, which rushed to the industry, suffered massive losses. The over-production was so large that the excess artemisinin has been used as buffer stock to even out shortages in supply following the bust of the artemisinin market.

This situation started a search for ways to stabilise and even out the artemisinin market. One of the solutions was to improve the communication between the farmers, API producers and healthcare initiatives (WHO), which was done by establishing Assured Artemisinin Supply Service (A2S2). Another solution was to look for less seasonal and quicker ways to produce artemisinin like the semi-synthetic artemisinin project.

On the situation Kathleen Monroe of Zagaya has stated that: Every year Zagaya and all of the folks in the supply chain for artemisinin, go to what's called the Artemisinin meeting... and it’s abundantly clear to me, that if you’re a farmer and you're growing Artemisia annua, and you sign up to a contract with a distributor and they agree to pay you ‘x’ amount per hectare for your product, and the price fluctuates and your price stays the same, who is in trouble here? The farmer is, but the middle man-the distributor is not. It’s a very ugly dynamic. If farmers know they can plant any other product e.g. a food product, like rice or corn and they can feed their families and they don’t have the same dynamic around the cost. They get paid a better price. Small farmers know their land and know what money they can make so they don’t usually make Artemisia. The farmers who do grow artemisinin are the big ones with their own plantations, calling all the shots, and they will harvest and grow Artemisia only when the prices rise. Because SSA is in the market, artemisinin’s price has come from 1500 per kg to 200 dollars. In India and China it is amazingly cheaper. More manufacturers out there decrease the price of the supply chain as it provides competition which is always a good thing.

The current situation and the possible future

Artemisinin Conference Report 2014 summary:
CHAI’s (Clinton Health Access Initiative) model shows a steady increase of ACT demand at consumer level, expected to reach about 600 million treatments by 2018 ACT sales expected to rise again after 2014 possibly to over 400 million treatments in 2015 and 45 million in 2016. If the yield per hectare cultivated of dry leaves of A. annua is lower than for food crops as it is today, farmers switch to food crops and will be difficult to re-motivate.

The slow but sustained decline of the artemisinin price in China, going below the USD 400 “fair price” mark in April 2013 and plateauing around USD 240 since April 2014, led to the voicing of serious concerns about a supply shortage in 2016, maybe even sooner. The existence of buffer stocks along the supply chain or reliance upon leaves from the wild may mitigate the risk. While the country reports (China, Vietnam, Madagascar and Kenya) add up to a total production of 136 MT, WDI’s (William Davidson Institute) analysis estimates the global natural production at 260MT, a 30-50% downfall from 2013 Sanofi foresees to have 55 MT equivalent semi-synthetic artemisinin in stock by the end of the year 2014.

Since the introduction of ACTs and their spectacular growth during the last 10 years there never was a shortage of natural artemisinin and that a first time shortage in 2015 or 2016 may unleash calls for an accelerated switch to SSA. Sanofi representatives assured plant-based artemisinin manufacturers that their factory in Italy has the capacity to produce 60 MT of SSA per annum and they have no plans to increase this.

The A2S2 project, which has been a key source for artemisinin data, as a case study, rolling data of imports and prices of artemisinin to India is still maintained and updated monthly.

Challenges for semi-synthetic artemisinin

As with all emerging technologies, there is concern and opposition to semi-synthetic artemisinin. In particular, one concern has been about the effects of replacing agriculture-based production of growing the A.annua plant with fermenting yeast vats. One of the most vocal voices in the debate is the ETC Group which was set up in the 1930s to campaign for rights for farmers. More recently it has evolved into an environmental technology watchdog, campaigning for more control and monitoring of emerging biotechnological innovations.

Among the concerns voiced for semi-synthetic artemisinin has been safety, regulation, and shifts in the production markets. One of the more unique arguments is that unlike other medical GMO products (eg. recombinant insulin), artemisinin is derived from a plant, which can theoretically be grown to meet the global demand. Their concern is that a shift towards semi-synthetic artemisinin will negatively impact the often-poor farmers of the plant in chief A. annua growing countries like China, Vietnam and Africa with China making 80% of total annual supply.

Jim Thomas of the ETC Group has written an article in response to Jay Keasling’s announcement that Amyris, in partnership with Sanofi will aim to completely replace plant extraction in the ACT production chain. He argues that A. annua growers will lose an important source of profits, because it’s more profitable to supplement growing food crops with artemisinin than to switch to food crops completely. In response to Jay Keasling’s hopes that centralising artemisinin supply will reduce and eventually eliminate the amount of monotherapies that are still being produced in spite of a WHO ban, which contributes to emerging artemisinin resistance, Jim Thomas argues that if ACT producers stop buying plant-derived artemisinin they will turn to the monotherapy industry which is evading the regulatory eye.

Another concern is that if the change is implemented too suddenly it will discourage botanical artemisinin producers and could result in a shortage of artemisinin before Sanofi is capable of completely satisfying global demand. This means that even more people will die when theoretically almost all cases of malaria are treatable.

Another more broadly voiced concern is that at the moment Sanofi has a monopoly on semi-synthetic artemisinin and so far no other companies have qualified for other ways to produce non-plant-derived artemisinin. This is enforced by the fact that the development of semi-synthetic artemisinin has been supplemented by large grants from the Bill and Melinda Gates Foundation and royalty-free agreements, which means that the actual price of industrial SSA is still uncertain.

Semi-synthetic artemisinin has also been called a novelty project, which benefited from fortunate timing and good PR. Jim Thomas has accused Amyris of using artemisinin to gain funding to start the company and they are now returning to their intended goal – production of other isoprenoids such as biofuels.

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