GlaxoSmithKline has decided that half a century is enough for an API plant, particularly one that has seen residential development grow up around it.
The British drugmaker says it will close the plant in Thane, Maharashtra, India, and ax more than 330 jobs rather than get out its checkbook to update the plant. A spokeswoman for GlaxoSmithKline ($GSK) tells in-PharmaTechnologist that it will be more cost-effective to contract for the APIs it needs. She said the 330 employees are taking "voluntary retirement."
"The Thane facility has been operational since 1961 and there has been an increasing cost on manufacturing needing significant capital investment to improve this location. This capital investment would make the Thane unit unviable because the products that were manufactured at this unit are available at competitive prices from third-party manufacturers in India," the spokeswoman says. The plant makes betamethasone, which is used in making steroids.
While India is known for its cheap drug manufacturing, being the world's leader in generic drugmaking, some domestic API makers there are looking for cheaper markets as they are finding themselves undercut by API makers in China. Ahmedabad-based Concord Biotech recently said it was shopping in Asia for a site to build a $20 million, 450,000-liter-capacity fermentation plant, because fermentation is an energy-eating process and it needs a cheaper source of energy than India to compete with Chinese generics.
India's burgeoning population and expanding middle class has attracted the Big Pharma players, which hope to offset slower sales in developed countries with faster growth in emerging markets. But with that development has come other changes and expectations. The country is trying to do a better job with environmental laws, even ordering a dozen drug plants to close recently to address pollution concerns. The ever-growing populace also played a part in GSK's decision to idle the API plant. When the plant opened 50 years ago, the neighborhood was "essentially an industrial belt" the GSK spokeswoman says. Now the area is a "mushrooming residential" area, leading to the decline in manufacturing in the area.
- read the in-PharmaTechnologist story
Indian API-maker looks to Asia for cheap energy
India regulator orders Aurobindo, others to close 12 plants
Novartis, India face off over patent-protection future there