PharmExec Blog

A Simple Plan (to Save US Pharma Manufacturing)

Fernando Muzzio and Mauricio Futran propose a plan to turn around pharmaceutical manufacturing in the US.

Pharmaceutical manufacturing in the US is in rapid decline. Higher regulatory standards for efficacy and safety, among other reasons, have led to a significant level of difficulty in replacing “blockbusters” developed in the 1980s and 1990s that are now coming off patent. The rapid growth in biological understanding remains a source for current and future drugs, but has also raised the bar on selectivity and toxicology expectations. Industry is also grappling with issues of quality and compliance in manufacturing. There are also fundamental reasons why pharmaceutical manufacturing has lagged behind other high-tech industries. Every product is a different molecule, with different characteristics, method of manufacture, analytical methodology, stability characteristics, and so forth. Most pharmaceutical products involve powder processing, which is—at best—a partially understood field. As a result, for every product, the entire product-development process is developed from scratch.

In contrast, other large-scale manufacturing industries such as petrochemicals, automobile, and microelectronics, deal with a much smaller number of materials and use processes that are better understood. The products and manufacturing methods evolve and improve with time because one can build on what was done before.

New divisions of players
Industry faces a pressing conundrum: how to manage the quality and compliance of pharmaceutical manufacturing, which has lagged behind other industries even in the best of times, during a period of cost-cutting and fragmentation, with a myriad of manufacturers of various degrees of sophistication in a variety of countries and cultures. At the same time, our country seeks to increase manufacturing as a percentage of the US economy as a means of remaining competitive as a nation. We propose here that these two imperatives are related and can be managed in an integrated fashion.

It is useful to separate pharmaceutical manufacturing, both primary and secondary, into two groups: those operations that have become conventional and essentially commoditized, which are now being executed around the globe, and which are unlikely to return to the US; and those operations which relate to novel, “smart” products and processes that are knowledge-intensive, have IP protections, and are less sensitive to labor costs.

In the case of the first group, commoditized manufacturing, quality and regulatory compliance remain crucial. Indeed, quality compliance has become more challenging in the outsourced-manufacturing environment because it now must be managed across many more intercompany barriers. Fortunately, a solution has been demonstrated in the chemical industry. The answer is to make manufacturing technology mature, transparent, and portable. The operations involved must be categorized and described in detail, making it possible to harmonize methods, approaches, operations, control algorithms, and quality tests, such that the operations can be understood fundamentally, modeled mathematically, and then executed under predictive-model controls as is done by other high-tech industries.
The later group of “smart” products and processes involve targeted drugs and delivery systems, personalized medicine, medicines prepared locally on demand, complex hybrid biologics, sensors, and new diagnostics. These technologies are enormously promising, but they require long-term fundamental research to create new products, new manufacturing methods, and new technologies.

A plan forward

Given this environment, re-energizing pharmaceutical manufacturing in the US is likely to take place only if a coherent plan is implemented. Such a plan must address four crucial elements: strong long-term technology development, a nurturing ecosystem where collaborations among innovation players are facilitated while transactional costs between them are minimized, science-based compliance with high quality standards, and a concerted effort to create and maintain a highly skilled labor pool capable of supplying the needs of industry, government, and academia. Thus, we propose a strategy involving the following components:
1. Create a long-term, strategically driven research center, bringing industry, academia, and government together.

2. Develop a well-funded, agile innovation ecosystem where technology customers (i.e., finished goods commercialization companies) and technology suppliers (e.g., NME suppliers, equipment and instrumentation companies, CROs, CMOs, commercial integrators, and universities) can work together effectively, with access to funding, and with minimal transactional overhead.

3. Establish a regulatory science center that can provide scientific support to the FDA and to ensure that regulations are updated, transparent, and promote higher quality standards while decreasing regulatory risk.

4. Enable training and educational programs that ensure a supply of properly skilled labor for all of the noted parties. To rejuvenate pharmaceutical product and process development and manufacturing in the US, an entire generation of pharmaceutical scientists (and their management) must be educated, or in some cases, re-educated on modern product and process engineering methodologies.

This approach is entirely feasible. One of the few silver linings of the recent massive restructuring in US-based branded pharma is that there is a ready supply of available scientists eagerly awaiting the opportunity to upgrade their technical skills. It is hard to conceive a better use of educational resources than to devote them to this purpose.

A plan such as the one proposed here will not happen spontaneously. It will take time and effort. It will take leadership and aggressive advocacy. However, if we consider the alternative, which is to let yet another great American industry leave our shores, the path forward appears self-evident.

To advance these goals, the authors plan to organize a Summit Meeting at Rutgers University in Spring 2012 to gather input from all sectors and to develop concrete plans. We call all leaders in the pharmaceutical industry, government, and academia to join us in an effort to bring these ideas to Washington.

For the full version of this article, click here.

About the authors
Fernando Muzzio, PhD, is director of NSF Engineering Research Center at Rutgers University. Mauricio Futran, PhD, is professor and chair of the Department of Chemical and Biochemical Engineering at Rutgers University (mauricio.futran@rutgers.edu)

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4 Comments

  1. Pete
    Posted December 2, 2011 at 4:58 am | Permalink

    Interesting concept but the one concern would be the demand for such technologically advanced products. By definition, these are likely to be high cost products, probably servicing a relatively small patient pool which will lead to the kind of cost/patient/year levels we have seen with some biologics. The capacity of the market, and willingness and capability of the payer to tolerate the growth in such products is questionable, especially when organisations like UK’s NICE are involved. Perhaps an alternative approach would be to look at modernising some of the archaic approaches used in manufacturing ‘commodities’ e.g. move to continuous processing, PAT etc. to reduce the costs to a point where the cost:benefit:risk calculations to manufacturing offshore become less clearcut. A reconsideration of the tax environment relative to offshore countries (e.g. Ireland) might also have a more effective and immediate effect.

  2. Newjersian
    Posted December 2, 2011 at 12:29 pm | Permalink

    I want to go back to basics. It is normally assumed that the manufacturing jobs went abroad due to very low labor cost. You are from Rutgers and must have access to databases. Can you take top five products and find % contribution of each factor to the total cost at which the product is sold – cost of API, cost of excipients, plant cost applicable per unit, labor cost, analytical cost, shipping charges, marketing expenses per unit, commission to the distributor, commission to the retail pharmacy etc. The contribution of labor cost to the total cost of product, in my mind, will be very small. Probably, there are many other reasons of manufacturing jobs going out of US. We need to identify them and fix them.

    Your article is very good. I liked the idea of a conference at Rutgers. We have to think collectively and identify the real issue.

  3. Ron Mammarella
    Posted December 2, 2011 at 6:18 pm | Permalink

    The authors hit the nail on the head. To strengthen US manufacturing, we need cooperation among government, academia and industry. This model is universal and can be used in various industries, not only in pharmaceuticals. Our political and academic leaders need to understand that quite literally we are at war; a war to preserve manufacturing in the USA. Our industrial leaders already understand this. Unfortunately, today they fight battles against a hostile or indifferent government rather than having the government as a partner.

    Germany recently successfully used this model to preserve domestic manufacturing, so we know it can be done. When posting, please use only my first name.

  4. Posted March 10, 2012 at 5:25 pm | Permalink

    The crazy part is a simple plan similar to this will save most of the industry’s that are struggling.

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