Pharmaceutical Benchmarking: A Contract-Manufacturing Perspective

A recent benchmarking report on pharmaceutical manufacturing raises questions about the performance of contract manufacturers, but further analysis also raises concerns about the process and data used to arrive at this conclusion.
May 02, 2007


Shane Ernst
Regulatory, consumer, and political organizations continually question the pharmaceutical industry concerning the quality and cost of the medicines that it manufactures. Contract manufacturers experience even further pressure as existing and potential customers weigh the quality and cost of manufacturing their products themselves versus outsourcing them. This pressure was increased by a recent study, Pharmaceutical Manufacturing Research Project–Final Benchmarking Report, conducted by Georgetown University and Washington University in St. Louis (1). Although the report contains useful observations for contract manufacturers to consider such as linking electronic deviation-management systems to superior performance metrics, the study also concluded that contract manufacturing correlates with inferior performance metrics.

Although the report's conclusion raises significant questions about contract manufacturers and their performance, a detailed analysis of the process used and data collected to arrive at this conclusion also raises concerns on the validity of the findings. Such questions arising from the report include:

  • What were the metrics used?
  • Were they adequately defined and did they meaningfully compare similar processes as they relate to contract manufacturing?
  • What was the study's scope and how did it influence and generate these benchmarks for contract manufacturers and their product-owner brethren?
  • Was this scope adequate to draw such a conclusion?

The study is useful for accurately identifying the performance metrics most associated with quality and cost: batches failed, cycle time, yield, and deviations. The study further offers a multitude of variables that may affect these parameters. Unfortunately, when considering how to define these key performance metrics, the study fails to take production volume into account and thus fails to assess each facility's ability to manufacture a batch without deviation or the need for rejection.

The study also fails to recognize the need to further categorize the data before data pooling, and therefore the data lose any meaningful comparison. As a result, the study's conclusion that contract-manufacturing performance corresponds with inferior performance metrics cannot be supported because of the limitations of the data.

Despite these limitations, the study does illuminate several strategic operating points for contract manufacturers to consider for optimizing their operations. The sheer number of variables considered in the study serves as a reminder of the importance of having meaningful metrics. The data suggesting that the contract-manufacturing facilities that participated in the study were generally large in size and scope can be an enormous strength for contract manufacturers if they have systems in place to ensure they capitalize on every experience. Also, the study accurately linked the use of electronic deviation-management systems to making corrective and preventive actions. Supported by a strong, metric-driven trending program stemming from an electronic deviation-management system and robust processes that capitalize on experience, contract manufacturers should have little trouble showing superior performance to potential customers.

Shane Ernst is quality assurance director, sterile operations, DSM Pharmaceutical Products, Inc., tel. 252.707.2327, fax 252.707.7512,

A detailed analysis by the author may be found in the April issue of PT Sourcing and Management at http:// http://www.pharmtech.com/pharmtech/static/staticHtml.jsp?id=406098

References

1. J. Macher and J. Nickerson, "Pharmaceutical Manufacturing Research Project–Final Benchmarking Report," McDonough School of Business, Georgetown University, Washington, DC and Olin School of Business, Washington University in St. Louis, St. Louis, MO, Sept. 2006, http://www.olin.wustl.edu/faculty/nickerson/results/, accessed Apr. 2. 2007.