World pharma companies question expenses on FDA approvals

It used to be all about looking good and making the right impression. Not any more. Pharmaceutical companies in tightly  regulated markets like the US and the UK, which were sprucing up their manufacturing units to impress regulators, have begun to question the need for such lavish investments.

For several years, major drug companies were playing a game of one-upmanship in the competitive global pharma market, investing huge sums to doll up their units before seeking the local Food and Drug Administration (FDA) nod. This led to the unnecessary spiralling of manufacturing costs.

Jerry Roth, president and CEO of Pharmaplan, US,  a company that  designs and engineers manufacturing units for companies, said: “The spiralling costs occurred because of the desire to achieve regulatory compliance without realising what is required. FDA guidelines are ambiguous and there is inconsistent interpretation. The one-upmanship between companies led to ratcheting of costs as each new facility was finished.” The regulators began to expect every facility they inspected to match what they saw in the previous unit, irrespective of whether the law asked for it, he said, “For instance, the FDA may require a room to be ‘clean’ before it can be used to produce anything. You can have an ordinary concrete floor that is kept clean, but companies go a step further and use expensive polished tiles. They use vinyl on the walls, instead of just painting them,” Mr Roth said.

The  recent change in the mindset assumes importance as Indian companies have begun to eye these high-margin tightly regulated markets and have to meet standards set by the local administrators. A continuation of the earlier trend would have meant huge sums of money spent on cosmetic refurbishments that did not necessarily add to the quality of the product made.

The gap between quality standards in developing and developed markets is narrowing as regulators in developing countries upgrade their standards, and those in developed countries tone down their expectations. “Companies are beginning to ask, is this really necessary?” Mr Roth said.

In fact Mr Roth is also a representative of the International Society of Pharmaceutical Engineering, which has released a range of guidebooks on manufacturing in collaboration with the likes of Glaxo Wellcome, Pfizer, Bayer, Merck and the US FDA. Called Baseline Guides, their objective is to provide consistent guidance, interpretation of regulation and reduce the cost of manufacturing while improving quality. These guidebooks are available both online and offline to companies.

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