Genzyme Stockholders Vote on Drug Manufacturing's Strategic Importance

Every so often, one gets a major reminder of the strategic importance of manufacturing and the largely invisible "CGMP set" to the drug industry and, yes, its bottom line. Former FDA chief Mark McClellan gave pharma a good one years ago with his famous "potato chips and soap flakes"  comment, immortalized in a Wall Street Journal piece. Typically, manufacturing continues to be thought of something that will get done....quietly, invisibly, wherever and by whomever. (Remember GSK's former CEO's statement a few years ago that the company would simply outsource the whole thing?)

Granted that innovation, discovery and research are critical to the future of any drug company, and to the industry.  And they're certainly more glamorous. But manufacturing is a key component of the high cost of drug quality today, and there can be innovation in manufacturing and compliance too. And these activities are very closely tied to bottom-line results. Research has shown, again and again, that lowering manufacturing costs would free billions of dollars for critical R&D efforts. When there are manufacturing and compliance problems, they set everything else back and damage competitiveness, especially when rivals await with competing products.

Recently, Genzyme's shareholders sent the company's top executives a reminder of manufacturing's importance, in the form of a lawsuit, alleging that the company had not disclosed, or adequately remedied, regulatory compliance issues and manufacturing bottlenecks at its Allston Landing plant. The company reports that FDA is ready to reinspect the facility, which has been a showcase for some more modern process control and OpEx practices (such as value stream mapping), but Genzyme's Gaucher disease treatment Cerezyme, is now in short supply, and FDA will reportedly allow a rival drug developed by Shire, to be approved on a fast track basis. More info here.

Clearly, manufacturing and quality assurance need to be on any CEO's priority list--not the details, certainly, but the big picture. How many pharma CEO's today can honestly claim that they are?

AMS