Finding Pharma Manufacturing’s Innovation ROI

A recent panel discussion at BIO 2014 magnified three topic areas: the ROI on quality and innovation, where best biopharmaceutical manufacturing might take place and what the industry can do with its regulatory partners to achieve quality through compliant manufacturing operations.

By Steven E. Kuehn, Editor-in-Chief

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Hamilton’s remarks served to frame commentary from Amgen's VanTrieste, which began with a reference to a 2003 The Wall Street Journal article on the sorry state of pharmaceutical manufacturing. The report, VanTrieste said, found that around the world pharmaceutical companies’ manufacturing techniques and technologies were completely outdated. “The [WSJ] simply said the potato chip manufacturers [had better quality and manufacturing processes than] pharmaceutical companies. I’d been around for a long time, so when I read the article, I was a little miffed and a little tore up. Once I got through the denial phase I started thinking, you know, I’ve never had a stale potato chip when I opened the bag and potato chips [are] really, really cheap.”

VanTrieste continued, citing the semiconductor industry’s rise in quality and manufacturing efficiency, and then compared that industry to the rise of Toyota which embraced Deming’s principles, lead a quality renaissance in the automotive industry, and became the world’s largest car maker in a short two decades. “The power of continuous improvement and scientific knowledge of your process and going after variability is very powerful,” said VanTrieste. “But if the car industry performed like what the semiconductor industry was doing – and these are actual facts, by the way – over the last 30 years, a Rolls-Royce would only cost $50.00. It would circle the globe twice on a half-gallon of gas. And it would go 2.5 million miles per hour. Now those things may deny physics … but clearly, that’s the kind of transformation that the semiconductor industry made,” VanTrieste explained, noting that it is probably the best example of the power of Deming’s approach. What’s the power of that in Pharma VanTrieste asked: “You heard $130 billion, and I’d say that’s probably right.” He told attendees that if one were to review a Six Sigma table and look at key quality performance indicators per million and what yield calculation should be, the cost of quality for the pharmaceutical industry is somewhere between three and four. “When I talk to all my colleagues, said VanTrieste, “the cost of quality at every pharmaceutical company is somewhere between 20 and 30 percent,”

VanTrieste illuminated his point further: “If you take a look at a company that has $2 billion in manufacturing costs, you’re talking a large pharma company, large biotech company – if you’re a Three Sigma, you’re spending between four and five hundred million dollars annually on your cost of poor quality. But if you could move that to Six Sigma, you’d reduce that cost of quality to sixty-million dollars. And I think that’s achievable; achievable in my lifetime. [one has to] ask why don’t we change? What keeps us from changing?” VanTrieste closed his remarks citing Amgen’s science-based empirical approach in designing the process to manufacture its very successful RA therapy; which he said performs at Six-Sigma levels. “If you’ve got a high-quality process,” said VanTrieste, “you shouldn’t [have to do] all that testing. We prepared an application to the FDASIA [and in it said] we don’t think we need to do all this testing and inspecting anymore. Here’s our process capability, here’s how we measure it, here’s where we measure it … and here’s the performance. We put a very comprehensive application together, and the FDA [gave us] approval this year …with no questions asked.”

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  • <p>Steve: </p> <p>One of my old post "Are The Savings of $120-$150 Billions Worth Having?"(<a href=""></a>) might be of interest. Actually the number is between $150- $200 billion. </p> <p>Opportunities are there but pharma has to discover them. They cannot be shoved down their throat. </p>


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