Pharmaceutical firms have outsourced drug production for decades after executives realised the market factors that allowed ingredient suppliers in Asia to make ingredients cheaply would also apply to the manufacture of finished formulations.
But while cost reduction remains the primary driver for outsourcing - according to a Deloitte study - other factors like supply chain stability, access to markets and technology are increasingly important says Jim Miller, president of PharmSource Information Services.
“Cost is a major motivator for outsourcing, but access to technology is increasingly important in the current environment, where there are a plethora of process and treatment technologies available” he told us.
Environmental concerns are also a factor Miller said, adding that: “Pharma companies definitely try to minimize the impact of drug production.
“For instance, synthesis of intermediates during manufacture of small molecule APIs can often result in toxic by-products. Process chemists work to refine or change processes to lessen or eliminate those toxic by-products as much as possible.”
Dhileepkumar Krishnamurthy, head of R&D at Piramal’s pharma solutions business, shares this opinion.
He told us “While all clients are interested in reducing costs, green chemistry based routes offer the opportunity to pursue a greener way of making drugs.”
Krishnamurthy added that: “The two factors are not mutually exclusive – indeed one of the attractive features about green chemistry is that the environmental and economic benefits go hand in hand.”
He explained that, in Piramal’s experience, well designed green chemistry based routes, also offer the opportunity to achieve a step change in reducing manufacturing cost contribution.
Further evidence for pharmaceutical companies’ desire for greener drug production comes when you look at the criteria they use to select contractors.
A few years back, Pfizer told us that it chooses to work with contract manufacturing organizations (CMOs) that share its sustainability aims.
More recently campaigning group SumOfUs praised GSK and partner DSM Sinochem for their efforts to reduce the environmental impact of their production operations in Asia.
Miller also believes that drug companies assess contractors’ green credentials before contracts.
He told us that “companies certainly eliminate from consideration companies that follow harmful environmental practices; this has been especially true for sourcing out of China and India.”