The high level of pharmaceutical company mergers and acquisitions plus industry-wide cost cutting has squeezed investment into manufacturing, but companies must be careful as failure to invest properly may lead to non-compliance with the appropriate Good Manufacturing Practice regulations, warns a new report from Urch Publishing.
The effect on the stock value and image of the company of not getting this balance right has been amply demonstrated in recent years. The level of fines being levied by the US Food and Drug Administration in consent decrees, most notably the $500 million penalty for Schering-Plough last year, makes it financially painful for companies that fail to comply to standards, according to the report, entitled Manufacturing in the Global Pharmaceuticals Industry - Key drivers, company strategies and regulations.
The report's author, Kate McCormick, said: "One thing is clear. The days of the pharmaceutical company being manufacturing-driven are over. Many companies do not see manufacturing as a core competency, but rather consider it merely as an activity that must be carried out efficiently and effectively for the company to perform. However, they must be careful and abide by the rules or risk being penalised by the authorities."
It is important that investment in manufacturing is recognised as just that - an investment - rather than an expense that brings no returns, continued McCormick, a consultant, who has over 20 years experience in pharmaceutical manufacturing.
"The question - why should we invest this money? - should be balanced by an understanding of the implications of not making that investment,," she said, adding that, in an industry as highly-regulated and quality critical as the drug sector, the ability of manufacturing to deliver consistent quality is a prerequisite for remaining in business.
McCormick notes that pharmaceutical manufacturing is in a state of flux, with excess capacity in traditional secondary production facilities. However, this is not the case for active pharmaceutical ingredients and, in the biopharma sector, there is currently a shortfall in capacity. The relentless march of pharma M&A in recent years has led to a contraction in manufacturing as the merged entities close duplicate resources and facilities around the world.
The report provides an overview of pharmaceutical manufacturing and serves as a reference text for companies that are introducing international standards of quality in manufacturing. It also reviews the main dosage forms being produced and the related technologies, the merits of Greenfield project versus refurbishment and validation.