Nearly two-thirds of respondents from innovator pharmaceutical companies (63.5%) and contract manufacturers (62.5%) reported
a greater percentage increase in spending in 2007, and more than half (55.6%) of respondents from consumer healthcare companies
As Figure 3 shows, companies spent the most on manufacturing and processing equipment (24.6%), followed by equipment and machinery
for manufacturing APIs (13.5%) and solid-dosage forms (13.5%).
A different distribution arose when respondents were asked about increases and decreases in spending for various types of
equipment and machinery. Companies most frequently increased spending for laboratory equipment (43.8%), quality-assurance
and -control equipment (43.4%), and manufacturing and processing machinery (40.7%).
Only about one-quarter of respondents said that their companies increased spending for machinery and equipment in 2007 for
solid-dosage manufacturing (26.7%), environmental control (27.2%), API manufacturing (27.5%), and parenteral manufacturing
(27.6%). Not only did fewer respondents increased spending in these areas, they also reduced spending in 2007. About 10.3%
of respondents decreased spending for equipment for solid-dosage manufacturing, 10.2% did so for processing equipment, and
8.0% did so for equipment for API manufacturing.
Reasons for spending in 2007
The factors that most influenced purchasing decisions in 2007 were compliance with good manufacturing practices (60% reported
high impact), expansion of manufacturing facilities (38%), and adding enhancements, upgrades, and/or technology (30%).
Initiatives by the US Food and Drug Administration such as quality by design (QbD) and process analytical technology (PAT)
did not seem to influence spending on equipment and machinery in 2007. Only 11.2% of respondents regarded PAT as a high-impact
factor in their purchasing decisions, and only 19.7% regarded QbD as a high-impact factor.
Although some pharmaceutical recently announced plans to rationalize manufacturing facilities and increase outsourcing, these
two factors did not play a significant role in purchasing decisions for equipment and machinery in 2007. Almost two-thirds
of respondents (62.9%) said closing of manufacturing facilities did not have an impact, and 17.8% said it had low impact.
Increased outsourcing also did not play a role. Almost one-third of respondents (30.7%) said that increased outsourcing played
no role in reducing expenditures on machinery and equipment, and 26.1% said outsourcing had a low impact.
Radio-frequency identification (RFID) technologies also played a small role in influencing buying habits. Half of the respondents
said that RFID had no impact, and 30.6% said it had little impact.
Spending projections for 2008
For 2008, respondents to the survey said they plan to spend slightly less than they spent in 2007. The mean percentage (as
a percentage of sales) for planned spending increases for 2008 is 4.4%, down from 5.3%, the mean percentage spent in 2007.
The median level, however, is stable. The median level of spending (as a percentage of sales) planned for 2008 is 2.1–4%,
the same level spent in 2007.
Figure 4 shows the level of spending planned for 2008 measured as a percentage of sales. Almost one-third (29.9%) of respondents
plan to spend less than 2%, 21.2% plan to spend 2.1–4%, and 18.2% plan to spend between 4.1–6%. Nearly one-third (30.7%) plan
to spend more than 6% of their sales on machinery and equipment in 2008.
Although the level of spending, as measured as a percentage of sales, is projected to decline in 2008, absolute levels of
spending are projected to rise slightly. The survey showed that the mean planned expenditure on machinery and equipment in
2008 is $65.9 million. This level is slightly higher than the mean level of $59.6 million spent in 2007.