Pharma Can Learn from US Auto Industry

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A CPhI report suggests that the pharma industry should be careful not to outsource to lower labor-cost countries rather than investing in manufacturing technology and innovation.

At CPhI Worldwide 2015 (Oct. 13–15, Madrid), CPhI Worldwide released part 3 of its annual report, which includes a Pharma Insights report by Prabir K. Basu, president of Pharma Manufacturing, OPEX and cGMP consultant, titled, "Innovation-can Pharmaceutical Manufacturing learn from the lessons in Auto Manufacturing in the US?" Basu suggests that pharmaceutical manufacturing in the US and Western Europe today has several characteristics in common with the US auto industry, which led to that industry's financial crisis in 2008. These include:

  • manufacturing inefficiencies

  • older plants and a lack of investment in technology

  • lack of innovation

  • lack of quality focus

  • reactive, rather than proactive, problem solving

  • outsourcing to low-cost labor. 

Although pharma has obtained high regulatory and compliance standards, "the current trend is that pharmaceutical manufacturing is gradually being outsourced to countries with lower labor cost without due consideration of regulatory standards in those countries, which have far less cGMP and regulatory history and experience," said Basu in the report. Quality cultures cannot be achieved overnight, but typically evolved over time, he warned. "Any experienced pharmaceutical manufacturing expert will agree that it is difficult to maintain low cost while investing in compliance...Quality is not cheap," added Basu. He warned that as products are outsourced to facilities in India and China, it is likely that these facilities are inheriting old processes with poor performance records, which creates quality risks.

Just as Japanese automakers obtained higher quality and greater success than US automakers by applying quality principles such as Deming's statistical process control, the pharmaceutical industry should take approaches such as quality by design, process analytical technology, and quality metrics, with greater investment in fundamental science and engineering to develop more cost-effective manufacturing processes, concluded Basu. 

Source: CPhI