Report: Industry's regulatory-centric focus for manufacturing will no longer cut it

President of EPCOT International Girish Malhotra

Quality lapses can lead to regulatory action, which can mean closed plants and so drug shortages. FDA Commissioner Margaret Hamburg has been harping at the industry for several years about the need to focus on quality to avoid this chain of events which is bad for patients and bad for business. But a new report says that the industry needs to move beyond its focus on what regulators want and dedicate itself to quality for its own rewards, to lower costs and build business.

"For cost savings to be made however, the report clearly states further improvements must come from the industry itself and not the regulator, as this will only increase costs." said the report by event organizer CPhI Worldwide. "Process centricity has to overtake the current regulation centricity if pharma wants to see cost reductions in new and existing processes," emphasized Girish Malhotra, president of EPCOT International, a part of a CPhI panel that authored the report.

Drug manufacturers put improved efficiency and safety at the top of their list of manufacturing goals but the missive also found that the "inertia of the existing model is impeding innovation and preventing widespread adoption."

That said, many drugmakers and manufacturers are relying on some form of process improvement strategy, be it statistical process control (26%), process capability analysis (21%) or some other improvement measurement. It also found that 70% are investing in their manufacturing networks. As far as staffing levels, 59% intend to boost headcount while only 4% are looking at cutting. It also found that 81% of manufacturers now test raw materials with 80% of those using compendium testing.

The ill effects of not paying attention to quality have played out across the entire industry in the last few years, here and elsewhere. Hospira ($HSP) has invested hundreds of million of dollars in upgrading facilities, while Boehringer Ingelheim decided to close a U.S. plant where remediation costs were eating into profits. Years of quality and regulatory problems at Ranbaxy Laboratories led Daiichi Sankyo earlier this month to agree to sell the company to Sun Pharma for $3.2 billion. But plant problems have also kept any number of drugs from being approved by the FDA, leading to lost revenues, remediation costs, litigation and sometimes dissolved partnerships.

But the report noted the industry could be on the cusp of a revolution in manufacturing techniques that will not only drive quality improvements but ultimately lower costs. This will be achieved, in part, by "cross-pollination." The efficiencies developed by generic makers may be adopted first by contractors and then eventually by branded drugmakers.

"With the majority of the industry now committed to process improvements and increased product quality, the next few years will hopefully see more new manufacturing methods coming to market, with tighter process controls- these should ultimately reduce costs and increase profits for the industry," said Chris Kilbee, group director pharma.

- here's the release
- get the report (PDF)