No one can accuse the drug industry of moving too fast. Timelines are typically measured in years. So, it's no surprise that pharma manufacturing hasn't taken a great leap forward, despite technologies and methods that automakers and electronics manufacturers--just to name two--have used to control quality, save money and increase efficiency. A Bureau of Labor Statistics study found that pharmaceutical manufacturing in the U.S. increased output per hour just 0.7% annually from 1987 to 2008, while other industries increased theirs up to 13%.
But biotech and pharma manufacturing have reached a tipping point. Pricing pressures, generic competition, the decline of the mass-market blockbuster, the rise of rare-disease and other specialty drugs, the push toward personalized medicine--all of these market forces are conspiring to change drugmaking processes for good. Addressing these trends will require a mixture of technologies and some mental shifts, too.
The effort will hardly be wasted: McKinsey & Co. quotes estimates that improving production efficiency could save the biopharmaceutical business as much as $50 billion. In biopharma, production improvements should be high on executives' priority lists. "For the next 15 to 20 years, we believe that manufacturing will be as strong a source of competitive advantage as R&D," McKinsey's Alberto Santagostino and Marco Ziegler write.
Manufacturing is moving forward on two tracks: the local and the express. "Improvements come in two flavors," says Rick Johnston, CEO of Bioproduction Group. "Incremental changes that aim to improve capacity, increase flexibility, or lower costs; and transformational changes that fundamentally alter the manner in which we produce or purify material."
That sort of revolutionary change requires revolutionaries, maverick thinkers who can move beyond the "enormous institutional inertia" Johnston cites as a key obstacle. But it also will rely on new technologies companies are using to make those smaller, incremental improvements. For more on both of these, read the full report. -- Tracy Staton