Overcome PAT’s Barriers and Find Its True Business Value

A cohesive strategy and top management commitment are critical to avoid the potential pitfalls of PAT projects.

By Manuel Hormaza, CEO and Founder, IBS Caribe

Editor's Note: To access the author's Business Value and ROI Calculation Model Sheet (a 1-page PDF document), which was first presented at December's NIR/Chemometrics seminar in San Juan, click the Download Now button at the end of this article.

The Process Analytical Technology (PAT) initiative has generated significant interest among pharmaceutical technology and regulatory professionals, as indicated by the number of recent articles and seminars devoted to the topic. However, when well-intended PAT supporters request funds for their projects from management, they are often turned down because they do not make a strong enough business case.

It doesn’t have to be this way. Many other industries have shown that PAT applications make good business sense. It is up to pharmaceutical manufacturing professionals to learn how in order to justify the business value of PAT for their organizations; this will not only help the project gain approval from management, but will help it succeed in implementation as well.

The need for change in the pharmaceutical industry is widely accepted. Parallel importation, globalization, mergers and acquisitions, competition from generics and, lately, a shifting regulatory landscape are just some of the pressures facing manufacturers. Plants have to adapt to survive, and PAT is one way to do this. PAT can also help new products to gain approval much more quickly than they might have in the past.

Converging forces

Besides the pressures for change, there are at present several converging trends and technologies that together facilitate and speed the adoption of PAT applications. They include:

  • Miniaturization and standardization of analyzers, software systems and processors;

  • The availability of robust multivariate sensors, including those with fiber optics and non-invasive real-time features;

  • The digital processing of massive amounts of data such as optical, spectral and other complex forms, including reference lots and statistical analysis;

  • The final realization and integration of shop-floor and MES solutions;

  • Clarification of 21 CFR Part 11 issues;

  • The hope of better technologies to come: microarrays, Lab-on-a-Chip, MEMS, nanotechnology and more.

A PAT business strategy and culture

Unfortunately, there have been many instances in which manufacturers have attempted to implement PAT with new equipment or software, only to find that the equipment is now gathering dust. Sometimes a company changes priorities, or the PAT project was found too costly to validate, or too difficult or time-consuming to implement. To avoid such “failures” and to attain the business value that comes with successful projects, a good project management effort, supported by a multidisciplinary business strategy, is imperative. Here are general principles:

  1. If top management is not committed, PAT will fail.

  2. If there is no empowerment, PAT will fail.

  3. If there is not a cohesive strategy, PAT will fail.

PAT is a not an end unto itself, but a toolbox that helps attain continuous process monitoring and control, eventually leading to real-time release and competitive advantage. Therefore, a sound business plan — one that can be tracked and measured in cost savings and quality improvements — is critical.

What value can PAT help attain?

There is no question that most PAT projects have significant costs associated with them, including the cost of in-line analyzers, software, installation and validation, and increased automation. But on the positive side, there is the promise of quality improvement, greater return on net assets, faster inventory turns, optimized capacity utilization, reduced product standard costs and reduced regulatory burden. All of these costs and benefits need to be identified and estimated.

The cost elements should include:

  • Technology acquisition costs — this covers the evaluation of multivariate sensors and their applications to the process, feasibility studies, and the education and training of plant personnel in these technologies. For quantification of the personnel costs, one must have the labor rates of the people involved, multiplied by the time expected to require.

  • Equipment and software acquisition, installation and validation.

  • Additional IT necessary to integrate data from legacy systems, along with its validation.

For most organizations, an “NIR across the board” strategy is wise, because the technology is quite applicable to many processes such as raw materials identification, blending, drying and particle sizing, and it reduces many of the referenced costs as compared to several types of multivariate sensors. But this strategy should not adopted at the expense of process understanding and monitoring.

Determining the benefits also requires an evaluation of the following parameters:

  • Quality improvement: This includes yield increases, increased acceptance rates and scrap reduction. It should also include reduction in labor resulting from fewer deviations, CAPA investigations, and other time-consuming activities.

  • Return on net assets, inventory turns: There is significant reduction in cycle times when you do not have to wait for lab results and batches can move continuously and without interruption. Targeted inventory amount is based on lead times and percent acceptance rates, both of which are positively affected by PAT projects. Some published projects have claimed more than 10% improvement.

  • Return on net assets, capacity utilization: By reducing cycle times and inventories, the capacity utilization drops, making equipment, storage and facilities available to make other products. Cost accountants usually use either of two systems for charging facilities costs to products: full absorption or capacity absorption. The latter allows for unused capacity to be charged separately and not to the standard product cost. Therefore, it reduces product cost to use facilities less.


  • Product standard cost reduction: This includes other elements not covered above, such as improved product movement and staging, fewer laboratory facilities and equipment, and reduction in analysis personnel. Since new tests are on-line, you no longer need all traditional lab tests to monitor processes.

  • Reduced regulatory burden: By estimating the cost of recalls, it is easier to see the benefits from a PAT project that could reduce the chance of a recall. If this is too speculative, include the importance of less FDA oversight and whatever that means to your plant.

All of these benefits usually easily surpass the costs by a factor, and help you determine your payback and ROI in terms of how quickly you recover your investment.

Barriers to implementing PAT

Even if the financials look good, there will always be risks or objections to PAT projects. To overcome this, you need to identify risks and level the playing field before you submit for internal approval. Some attitudes you may find are:

  • “Why change? Let’s make today’s lot the same as yesterday.”


  • “Let’s wait until the FDA requires it.”


  • “Only on new formulations can we make a difference.”


  • “Parametric real-time release? Not in my lifetime.”


  • “We don’t have funds for technology geeks that lead us to the bleeding edge.”

PAT is a revolution in pharmaceutical manufacturing, with several drivers: regulatory interest, market needs, converging technologies and, it is hoped, increased business value. PAT is a process, not a fad or program that can be implemented in a quarter. It is quality by design!

Editor's Note: To access the author's Business Value and ROI Calculation Model Sheet (a 1-page PDF document), which was first presented at December's NIR/Chemometrics seminar in San Juan, click the Download Now button below.

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