Contract manufacturing linked to underperformance, says report

By Emilie Reymond

- Last updated on GMT

Related tags Contract manufacturing Manufacturing

Firms engaging in both in-house and contract pharma manufacturing
generally display inferior performance compared to manufacturers
conducting only in-house production, according to new research.

The study - which claims to be largest ever conducted on the industry - analysed not only manufacturers' practices but also the US Food and Drug Administration (FDA) monitoring policies and found a number of factors that had an influence on drug makers' performances.

It found that firms engaging in contract manufacturing as well as making their own products in-house, for example, fail more batches than drug makers not engaged in contract manufacturing.

Add this to the fact that the report showed an already general low performance for the pharma companies studied, with waste costs reaching an estimated $50bn (€39bn), and it seems that those involved in this extracurricular contract manufacturing activity may be lagging behind in an already poorly performing sector and need to raise their game.

It is important to note, however, that dedicated contract manufacturing organisations (CMOs) were not evaluated as part of this research.

The research compared the data collected from oral and topical (O&T) manufacturing facilities, active pharmaceutical ingredients (API) manufacturing facilities, and injectable (I) manufacturing facilities - from a total of 42 plants owned by 19 manufacturers.

According to researchers at Washington University and Georgetown University, contract manufacturers of oral, topical and injectable (OT&I) drugs appear to suffer on numerous performance dimensions.

The study found that these had a higher number of batches failed, longer cycle times and declining yields over time than those facilities that do not engage in outsourcing.

However, "to their benefit, OT&I contract manufacturers reduce the number of process and product parameter deviations over time",​ the researchers said.

Similarly, API contract manufacturers suffer from a higher level of batches failed, longer cycle times, and increases in process component deviations over time.

However, the research found that API contract manufacturers improve actual yield over time, have lower levels of raw material deviations, and reduce product and process parameter deviations over time.

The research identified five key areas of waste in the manufacturing industry that, if addressed, could lower drug manufacturing costs.

The study also found that facilities that did not create waste in these areas generally displayed better performance.

To find the reasons for this underperformance, the researchers analysed previously available data from the FDA and found that that regulations also have cost implications on drug manufacturers, as, for example, it was found that individual regulators were not identical in how they inspect a facility.

"Firms tend to be risk-averse in terms of manufacturing practices because of regulations,"​ Jackson Nickerson, professor of organisation and strategy at Washington University in St. Louis and co-author of the research, told​.

The researchers said that they were now prepared to propose solutions to improve regulations so that the FDA and pharma companies start taking a risk-based approach.

"We think that by increasing yield and reducing cycle time and deviation, firms have opportunities to save on costs, but these opportunities are difficult to capture,"​ said Nickerson.

In the past, pharma regulations have looked at safety issues but haven't looked at costs and as far as drug manufacturers are concerned, the big money has always been spent on the discovery of new compounds, which can partly explain present issues, he added.

The FDA told the research team that it found the report very useful and that it would "take actions to improve the situation."

However, the research, which took several years to complete, received no funding from either the pharmaceutical industry or the FDA.

Related news

Show more

Related products

show more

Ultra Low Temperature Packaging solutions

Ultra Low Temperature Packaging solutions

Content provided by Almac Group | 12-Feb-2024 | Case Study

Advanced Therapy Medicinal Products (ATMPs) offer ground-breaking opportunities for treating injuries and disease, in particular for cases of severe, untreatable...

Increasing the Bioavailability of Oncology Drugs

Increasing the Bioavailability of Oncology Drugs

Content provided by Lonza Small Molecules | 13-Nov-2023 | White Paper

Oral tyrosine kinase inhibitors (TKIs) are a class of cancer drugs that can be highly susceptible to issues with solubility in the gastrointestinal tract

Efficient Freezing & Storage of Biopharmaceuticals

Efficient Freezing & Storage of Biopharmaceuticals

Content provided by Single Use Support | 06-Nov-2023 | White Paper

Various options exist for freezing biopharmaceutical bulk material, but selecting the most effective and efficient approach for each cold chain can be...

Related suppliers

Follow us