Laura Bush
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"I used to feel proud that I was part of one of America's lasting manufacturing industries," an executive from a biotech company
confessed recently. "Now, however, I am not so sure that's true."
Presumably, a number of trends have influenced his outlook. First, pharmaceutical companies are outsourcing more than ever.
Pfizer is just one example of a Big Pharma company that has given up being a fully integrated pharmaceutical company, or FIPCO,
to become a FIPNet, a fully integrated network. Gone are the days when they assumed they would make all drugs in-house; today, make-or-buy decisions are made strategically.
Pfizer now outsources around 17% of its manufacturing, and its goal for three years from now is 30%. Similarly, Merck has
announced plans to double outsourcing by 2010, to approximately 35% overall. AstraZeneca's David Smith famously went to the
extreme, with his 2007 statement (later retracted) that the company would outsource all drug manufacturing in 10 years. These
percentages apply mainly to small molecules, and in-house cell culture capacity is currently high, which should delay this
trend in biotech. But it looms out there as a possibility.
Second, site competition for new facilities is fierce, and tax incentives can make foreign locations appealing. Ireland has
attracted big players like Wyeth and Pfizer (see "Speed and Efficiency in Designing and Building a Monoclonal Antibodies Pilot
Plant"), and now Genentech and Lonza are setting up plants in Singapore.
Third, as we all know, low-cost countries like India and China are ramping up their biotech capabilities. A recent New York Times article highlighted the fact that penicillin API, once produced at many US plants, now is made exclusively in China. Sure,
antibiotics are an off-patent, low-margin business, but it wasn't always that way. For my parents' generation, the broad availability
of these drugs following World War II was a life-changing innovation.
Fourth, mammalian cell culture titers are now doubling about every four years. One day, the standard six-pack of 15,000-L
bioreactors may be replaced by a set of 2,000-L single-use fermenters for commercial-scale production. Presuming downstream
processing catches up (see this month's supplement on purifying high titers), new plants will be smaller and require less
upfront capital. That will make it easier for small companies, here and abroad, to build them. And the simpler cleaning validation
offered by single-use technologies will make it cheaper and easier to run these plants, too. At some point, the heavy investments
in large, stainless-steel based facilities that US companies have made (to hedge the risk of running short on capacity) may
become a burden.
Of course, it is not clear how far these trends will go, or how quickly. And indeed, managing an increasingly globalized network
is just one of the issues manufacturing executives face as they plan for the future. Other important concerns include the
broader issue of manufacturing economics—of which global outsourcing is just one piece—supply-chain security, decisions about
investing in Quality by Design, and the ever-present puzzle of capacity planning, only made trickier by ever-increasing upstream
yields.
So what is the future of biopharmaceutical manufacturing? On March 17 at Interphex, we will explore the issues involved with
an expert panel of senior executives from Genentech, Eli Lilly, and Wyeth. Join me as I ask the panel to weigh in on these
challenges and try to predict what lies ahead.
In the meantime, you can hear preview interviews at
http://www.biopharminternational.com/InterphexKeynote. I hope you'll join us for the discussion.
Laura Bush is the editor in chief of BioPharm International, lbush@advanstar.com
