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Diane Ramirez

Aging Manufacturing Facilities Worsen Global Drug Shortages

by Diane Ramirez | Dun & Bradstreet Editor

June 2, 2015 | No Comments »

Prescription-bottle-empty_shutterstock_32939647_990pxMore than 250 prescription drugs are considered in short supply in the US, including vital cancer drugs and antibiotics. One of the primary known causes for these shortages has been a spate of problems (contamination, lapsed quality control) at pharmaceutical manufacturing facilities. According to the University of Utah Drug Information Service, manufacturing problems accounted for a quarter of the shortages in 2014, above supply and demand issues (which accounted for 17% of the shortages).

The impact of these shortages has been deadly and goes beyond the US. In early 2015 FORTUNE published an article stating that, in 2011, shortages may have contributed to the deaths of 15 patients that couldn’t access needed medications. Furthermore, the problem has only gotten worse: More drugs are in short supply than a decade ago, when the FDA listed around 150 hard-to-access medicines.

Earlier this week The Wall Street Journal wrote about this issue, citing the shortage of bladder cancer treatment BCG, which is primarily produced by Sanofi and Merck. Both manufacturers have experienced production delays related to the drug; to make matters worse, BCG is no longer patent-protected, so it has not brought in the capital needed to maintain the very facilities in which it is made.

The aging of manufacturing facilities, which are sometimes operated past their expected life span of 20-25 years, is one of the major factors that have led to these shortages. Upkeep and modernization efforts are quite costly, and if the drugs being manufactured aren’t very profitable, the likelihood that production will be curtailed rises.

One way that pharma firms have worked to combat these issues is to hire consulting firms that specialize in technical operations such as biotechnology and aseptic processing (maintaining a sterile product/environment). These companies suggest ways to save money using nontraditional technologies that lengthen the life of a manufacturing facility. As long as the adjustments are minimal enough to not be considered a material change in process, regulatory approvals won’t be necessary. However, that process is a balancing act, and anything that triggers an investigation by regulatory authorities can cause delays in production.

Indian drugmaking giant Sun Pharmaceuticals, which acquired top generics producer Ranbaxy earlier this year, is faced with the challenge of updating four India facilities it gained with the Ranbaxy purchase. These plants are currently unable to export to the US because they’ve been cited by the FDA with serious manufacturing and testing infractions. The Ranbaxy deal has already had an impact on Sun Pharma, which missed analyst expectations last week as a result of higher expenses and one-time charges. Sun has “fairly intense” remediation plans in place for its troubled facilities (including its own Halol facility) as it works to regain FDA approval for production.

State-owned Myanmar Pharmaceutical Factory (MPF) plans to invest $30 million (of its $46 million budget) to upgrade and expand its plant in Yangon. It hopes to meet the World Health Organization’s good manufacturing practices (GMP) to better compete with drug importers from neighboring countries India, China, and Thailand. As MPF and others work to revive and improve manufacturing facilities, opportunities arise for contractors looking to build and install equipment.

The good news is that new manufacturing facilities are being designed to be more flexible and less costly than those of even a decade ago. This is beneficial as many pharmaceutical makers are building new plants in emerging markets such as China. Modular components (such as those provided by Modular Partners and Pharmadule) and other innovations are becoming the norm, resulting in facilities that can be built more speedily and are capable of rapidly responding to changes in technologies. Getting regulators involved during the design process is also a good idea, as it prevents pricey mistakes from the earliest stages.

According to industry insiders, some upper management — with the bottom line on their minds — have been reluctant to make such major investments. In addition to implementing new technologies and upgrading older equipment to today’s standards, proper management protocols must be put in place and employees must be trained, further adding to a company’s expenses. There is no way to avoid the fact, however, that drugmakers will need to bite the bullet and invest in their facilities.

Diane Ramirez has been a member of the D&B editorial department for more than a decade. She currently covers the health care and insurance industries for Hoover’s.

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