2016 Pharmaceutical Equipment Buying Trends

As the pharma industry undergoes significant change, spending for innovative equipment and technologies is escalating to meet new demands

By Nigel Walker, Managing Director, That’s Nice LLC / Nice Insight

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The hottest news in pharmaceutical equipment purchasing is the significant increase in equipment budgets from 2013 to 2015 — a whopping 69%, according to the Nice Insight’s 2016 Pharmaceutical Equipment Annual Survey of 489 pharmaceutical and biotech industry professionals worldwide involved in purchasing new systems and technology.[1] Dramatic industry changes are the key drivers of the increasing demand for faster, safer, and more versatile equipment.

The survey shows that more than one-third (36%) of those involved in equipment buying decisions now have an annual budget of $50 million to $100 million, and another 21% have a budget of more than $100 million for equipment purchases. A quarter of the respondents have authorized spending limits of $250,000 and more, and 37% have limits of $100,000 to $250,000.

Respondents were mainly from biopharma companies (45%) and branded pharma companies (27%), primarily from North America (41%) and Asia (40%), with the majority from large pharma (46%) and mid-sized companies (38%). Most hold managerial or executive positions in their respective departments and have a sound technical and commercial understanding of their pharmaceutical equipment categories. Nearly all respondents (90%) support internal processes for specification and purchase of process and production technologies, and more than three-quarters are authorized to approve capital equipment purchasing.

The increased spending for equipment and technology is based on dramatic changes in the pharmaceutical and biotechnology industry along with fierce competition. This industry transformation is driven by pressures to lower costs and increase productivity and pipelines. Likewise, pharmaceutical equipment needs across the supply chain are evolving, from the discovery stage to packaging of final products. Major drivers of the change include mergers and acquisitions resulting in capacity changes, the globalization of pharmaceutical supply chains, and changing pipelines requiring equipment innovation.

Over the last decade, the industry has seen the rise of biotechnology-derived drugs (the fastest-growing sector of the pharmaceutical industry) and smaller-volume niche drugs, as well as new cell-culture techniques and biomanufacturing formats. Niche and targeted therapies call for smaller-scale, more diverse types of production, and many new biologics need specialized manufacturing. In the pharmaceutical sciences area, there has been an increase in poorly soluble drugs, requiring additional processing steps.

There is also a growing interest in continuous processing for the manufacture of both APIs and pharmaceutical finished products. The main drivers seem to be simplification of scale up and flexible batch sizes to match demand. The equipment scale does not change — only the running time changes when the dynamic steady state is reached.

Continuous bioprocessing is emerging as a new trend in biopharmaceutical manufacturing, and the demand is likely to spur additional development of this technology, according to a recent survey by BioPlan Associates. The industry’s desire for continuous bioprocessing innovation is more focused on downstream than upstream processes.[2]

Equipment suppliers are responding to the industry demands for newer types of equipment and technologies that are more efficient, less costly, safer and able to meet new industry needs and more rigorous regulatory guidelines. Some of the key trends impacting equipment purchasing for pharmaceutical manufacturing and bioprocessing are: broader use of single-use technology, continuous small-molecule and biopharmaceutical manufacturing, and equipment for potent substances and personalized medicine.

Single-use technology, widely used in biopharmaceutical drug development, is increasingly being used in larger, even commercial scales in the production of biologics. These flexible systems can reduce operating costs and capital expenditures as they replace traditional, more costly tools such as chromatography columns and stainless-steel skids.

The major advantages of continuous manufacturing are that it results in more consistent products and processes, consumes fewer resources, minimizes waste and lowers operating costs.
What Drives Purchasing Decisions?

The leading driver of pharmaceutical equipment purchase decisions, as ranked by 36% of respondents, is reliability, which is defined as the seller gives the impression the company is stable, reliable and dependable. Next, in order of rank, are process integrity (equipment is manufactured and packaged in compliance with stringent rules), customer service and total cost of ownership, which is the ideal asset purchase price with efficient cost of operation. Equipment efficiency and post-sale support are lower in priority.

For most buyers, improving quality and ensuring sterility as well as satisfying market demand are the leading factors influencing their equipment purchases. Other important drivers are an increase in capacity to meet the growing demand for existing products, the need to improve equipment effectiveness and upgrade to newer equipment.

Ironically, while quality is the leading influencer of purchasing, product and system quality is also the main source of dissatisfaction. The next highest-ranking sources of dissatisfaction are product durability and reliability, followed by poor customer service, cost overruns and insufficient technical expertise of sellers.

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