In March 2012, SmithKline (GSK) announced plans to invest more than £500 million ($798 million) in the UK across its manufacturing
sites, which included selecting Ulverston in Cumbria as the location for the first new GSK manufacturing facility to be built
in the UK in almost 40 years. The company also will invest in sites in Montrose and Irvine, Scotland.
GSK's announcement followed plans by the UK government to implement a "patent box" to encourage investment in R&D and related
manufacturing in the UK by introducing a lower rate of corporation tax on profits generated from UK-owned intellectual property.
Following a feasibility study conducted through 2011, GSK said it will locate a new £350 million ($559 million) biopharmaceutical
manufacturing facility in Ulverston, Cumbria. Detailed planning and design of the new facility is underway with an anticipated
start date for construction of 2014–2015, dependent on portfolio timing and obtaining necessary planning and related consents.
Once construction starts, it is likely to take at least six years before the plant is fully operational.
GSK also reported in March 2012 that it is considering additional manufacturing investment at Ulverston, which could double
the total investment at the site to approximately £700 million ($1.1 billion). GSK will invest more than £100 million ($160
million) in its two manufacturing sites in Scotland: an expansion at Montrose for key materials for its respiratory drug and
aluminum adjuvants for vaccines and expanded antibiotic production capacity at Irvine. GSK will also invest in sustainable
green-energy production and environmentally friendly manufacturing technologies at both sites. The company is making other
investments totaling £80 million ($128 million) at its sites in Ware in Hertfordshire to increase manufacturing capacity for
its respiratory-inhalation device and at Barnard Castle in County Durham to establish a dermatology-manufacturing center of
As GSK proceeds with new manufacturing investment, it continues to restructure. In 2011, GSK met its original target of £2.2
billion ($3.4 billion) in annual cost-savings and identified additional annual savings of approximately £600 million ($931
million), bringing expected total annual savings of £2.8 billion ($4.3 billion) by 2014. GSK has cut its pharmaceutical R&D
footprint by more than 45% during the past three years from 494,000 m2 to 295,000 m2. During the same period, its manufacturing organization has achieved annual savings of approximately £600 million ($931 million).
Since 2006, GSK has exited 19 manufacturing sites, including selling or closing four factories in 2011, thereby reducing its
total number of manufacturing sites to 74.
In February 2012, AstraZeneca announced new restructuring initiatives aimed at delivering annual cost-savings of $1.6 billion
by the end of 2014. The restructuring will reduce headcount by 7300. The job cuts include 1350 positions in supply-chain and
manufacturing operations and 2220 positions in R&D, including ending R&D activity at sites in Sodertalje, Sweden, and Montreal.
Overall, AstraZeneca's capital expenditures on supply and manufacturing facilities were approximately $388 million in 2011
(2010: $333 million; 2009: $360 million). At the end of 2011, approximately 9600 people at 23 sites in 16 countries were working
on the manufacturing and supply of products. In October 2011, AstraZeneca announced an investment of $200 million to build
a manufacturing facility in China Medical City in Taizhou, Jiangsu province, China, to meet growing local demand.
In May 2012, FDA approved Bristol-Myers Squibb's biologics manufacturing facility in Devens, Massachusetts, for commercial
production of the company's arthritis drug Orencia (abatacept). The $750-million multiproduct bulk biologics manufacturing
facility in Devens represented the largest capital project in the company's history.