Measured growth. That is the best way to sum up the manufacturing investment activity of the pharmaceutical majors during the past year. Companies continue to implement restructuring programs as a way to reduce costs and optimize their manufacturing and supply networks. Investment, when it is made, is primarily in biologic-based manufacturing and emerging markets, with a few select projects proceeding in established product and geographic markets.
Novartis. In 2010, Novartis initiated a company-wide program to review its manufacturing footprint, which progressed in 2011, with major goals to create manufacturing centers of excellence, reduce its cost structure, and enhance utilization rates at strategic sites to 80% of capacity. To these ends, the company has announced the exit or partial exit of 14 sites since the program started in 2010. In Liverpool, UK, and Marburg, Germany, Novartis discontinued certain manufacturing activities to consolidate its influenza-vaccine platforms. Novartis also divested the pharmaceuticals division's sites in Casablanca, Morocco, and Huningue, France, and Sandoz (the generic-drug business of Novartis) sites in Jena, Germany, and Buenos Aires, Argentina. The company also discontinued pharmaceuticals manufacturing at sites in Tlalpan, Mexico, and Horsham, UK, and exited CIBA Vision production sites in Cidra, Puerto Rico, and Farnham, UK. Additionally, the company announced the discontinuation of certain manufacturing activities at its CIBA Vision site in Atlanta, Georgia, and the consolidation of pharmaceutical chemical operations in Switzerland, as well as closure of its chemical operations in Torre, Italy.
Novartis continues to make progress in the long-term redevelopment of its St. Johann headquarters site in Basel, Switzerland. This project, called "Campus," started in 2001 with the aim of transforming the site from one of primarily pharmaceutical production into a center of knowledge with a primary emphasis on international corporate functions and research activities. Through Dec. 31, 2011, the total amount paid and committed to be paid on the Campus Project was $2.1 billion. The company expects that through 2015, it will spend more than $2.5 billion and transfer production facilities to other sites in the Basel region.