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Pharmaceutical Technology's annual survey on equipment and machinery reveals the spending levels and types of spending made in 2009 and planned for 2010.
Pharmaceutical Technology's annual survey on purchasing and innovation trends for equipment and machinery shows a slight uptick in spending in 2010. Overall economic conditions curtailed spending in 2009, but there is some improvement in 2010 as financial conditions improve. Purchasing relating to equipment for biologics manufacturing—both drug-substance and finished-drug product—was a strong area of investment in 2009 and is again for planned expenditures in 2010. Respondents were also fairly upbeat about the level of product innovation, although spending for newer initiatives such as quality by design (QbD) and process analytical technology (PAT) is not having a strong influence on purchasing decisions.
Spending levels for 2009. The survey results showed that 44.1% of respondents increased spending on machinery and equipment in 2009 compared with 2008 levels, and 31.4% kept it the same. Nearly a quarter of respondents (24.5%) decreased spending in 2009 compared with 2008.
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For those companies that spent more, 12.5% increased spending between 0 and 2%, 23.6% between2 and 4%, and 16.6% between 4 and 6%. Surprisingly, almost half of the respondents increased their purchases by more than 6%. The survey showed that 18.1% raised their expenditures between 6 and 8%, and 29.2% increased spending by more than 8%.
Although spending increases were robust in 2009 for those companies spending more, the declines for those decreasing spending in 2009 were more pronounced. For those companies reducing spending in 2009, 65.7% decreased spending by more than 8%, and approximately 17% reduced their expenditures between 4 and 8%.
For all respondents, purchasing decisions were delayed in 2009. The survey showed that 42.1% of respondents postponed purchases for equipment and machinery in 2009. Nearly a quarter of respondents (23.7%) reduced production because of customers' financial difficulties, and 18.4% had difficulty securing financing for capital investments. Also, 12.6% of respondents increased outsourcing to reduce capital costs.
Planned expenditures for 2010. The survey results showed similar purchasing trends for planned spending in 2010, with only slightly more respondents expecting to decrease spending on equipment and machinery in 2010. More than one-quarter (26.7%) of respondents plan to decrease spending in 2010, which is slightly up from the 24.5% of respondents that reduced their spending in 2009. The number of respondents planning to purchase more equipment and machinery in 2010 is 44.8%, which is on par with the 44.1% of respondents that increased spending in 2009. Nearly one-third of respondents (28.5%) plan to keep expenditures flat for 2010.
So to what degree will companies be increasing spending in 2010? More than half of respondents plan moderate spending. Almost one-quarter (23.1%) will increase their expenditures by up to 2%, and 19.2% will raise their purchasing between 2 and 4%. At the other end of the spectrum, fewer respondents plan to make large increases in spending in 2010 compared with 2009. For 2010, 19.2% of respondents plan to increase spending by more than 8%. In 2009, almost 30% of respondents increased spending by more than 8%.
Although the level of higher purchases is less in 2010 than 2009, the good news is that the extent of decline for those companies decreasing spending is not as great as it was in 2009. Of those respondents that plan to decrease spending in 2010, more than half (46.4%) plan to decrease spending by 8%. Although still a significant percentage, it is an improvement compared with 2009, when 66% of the respondents decreased spending by more than 8%.
Moreover, the survey showed fewer adverse effects on purchasing in 2010 compared with 2009. More than one-third (36.5%) of respondents plan to postpone purchasing equipment and machinery in 2010, which is less than the 42.1% that postponed purchasing in 2009. Roughly 15% of respondents, however, are experiencing some adverse financial effects. The survey showed that 16.4% of respondents are having difficulty in securing financing for capital investments in 2010, and 16.4% are facing reduced production because of customers' financial difficulties. Nearly 16% of respondents (15.7%) do not plan to purchase equipment and machinery in 2010, which is almost double the amount of respondents (7.9%) that did not buy equipment and machinery in 2009.
Areas of spend
So in what areas did companies spend the most in 2009? Thirty-one percent of respondents spent the most on solid-dosage manufacturing. Parenteral manufacturing or sterile manufacturing/aseptic processing ranked as the second highest area with 18.5% spending the most in this area, and 15.8% spent the most on biologic-based API manufacturing (see Figure 1).
A similar pattern exists for planned spending in 2010. Respondents plan to spend the most in solid-dosage manufacturing (28% of respondents). Almost 20% of respondents (19.1%) plan to spend the most in parenteral manufacturing or aseptic processing/sterile manufacturing, and 16.6% will spend the most in biologic-based API manufacturing (see Figure 2).
The survey also examined the factors that influenced purchasing decisions. As might be expected, compliance with good manufacturing practices (GMPs) was a leading reason behind spending decisions. The survey showed that 56.1% of respondents said compliance with GMPs was a "high-impact" factor in their purchasing decisions, and 26.5% said it had "medium impact" (see Figure 3). Macroeconomic conditions also had a large effect. The survey showed that 41.4% of respondents said overall economic conditions had a "high impact" on their purchasing decisions (See Figure 3). Other high-impact factors were expansion of manufacturing facilities (35.6% of respondents cited as a high-impact factor), replacement of existing equipment (22.3%), and upgrades or addition of technology (24.2%). Interestedly, initiatives such as QbD and PAT seemed to have little impact on purchasing decisions. Two-thirds of respondents said that PAT had "little or no impact" on their purchasing decisions, and 51.9% said QbD had "little or no impact" on their spending decision in 2009.
A similar pattern emerges for 2010. As in 2009, GMP compliance was the leading reason for purchasing machinery and equipment in 2010, with 75.5% of respondents citing GMP compliance as a "high- or medium- impact" factor (see Figure 4). As overall economic conditions improve somewhat in 2010, the economy, although still a crucial factor, is not negatively affecting purchasing decisions as much in 2010 as it did in 2009. The survey showed that 68.7% of respondents said that overall economic conditions are a "high- or medium- impact factor" on their spending plans for 2010 compared with 77.5% that ranked the economy as a "high- or medium-impact" factor in 2009 (see Figure 4). As in 2009, the influence of PAT and QbD is having a minimal effect on 2010 purchasing decisions. (see Figure 4).
Innovation is an important consideration in purchasing decisions. The survey showed that 16.1% of respondents said that innovation is "extremely important" in their purchasing decisions, and 47.7% said it was "very important." Respondents were fairly favorable in evaluating the level of innovation in equipment and machinery during the past two years (2008 and 2009) (see Figure 5). Almost one-quarter of respondents said that innovation in machinery and equipment for quality assurance and control was "high," and 50.7% ranked the level of innovation as "medium" (see Figure 5).
Respondents felt innovation was highest in disposables or single-use components for biopharmceutical manufacturing, followed by process control and automation, and analytical instrumentation (See Figure 6). Product areas that showed the lowest levels of innovation according to survey respondents were vial- or syringe-filling and tablet presses or capsule-filling machines. Almost half of the respondents (49%) said there has been "none or low" innovation in equipment for vial- or syringe-filling, and 47.6% said there has been "none or low" innovation for tablet presses or capsule-filling machines during the past two years (see Figure 6).
QbD and PAT
Among survey respondents, adoption of PAT was low. Two-thirds of respondents (67.1%) said that their company does not incorporate PAT into its manufacturing processes, and 32.9% of companies said they have incorporated PAT. For those companies that do incorporate PAT, the leading benefit cited by respondents was better process understanding (73% of respondents cited as a benefit) (see Figure 7). Almost half of the respondents using PAT said that it increased efficiency and reduced waste.
Cost–benefit factors were the leading reasons for companies not incorporating PAT into their manufacturing processes. Almost one-third of respondents (31.8%) said that "benefits do not justify the effort to implement" (see Figure 8). One-quarter of respondents said PAT implementation was too costly, and one-quarter also said that their companies do not use PAT because it would require new equipment or procedures (see Figure 8).