2016 Pharmaceutical Equipment Buying Trends

July 12, 2016
As the pharma industry undergoes significant change, spending for innovative equipment and technologies is escalating to meet new demands

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.

The majority of buyers have in-house clinical and commercial-scale manufacturing (61%) and packaging capabilities (68%). The primary types of dosage forms they manufacture are oral solid dosage and liquid (64% each).

When evaluating equipment providers, most buyers consider manufacturing and process integrity the most important attributes. About half of those who make or influence purchasing decisions consider the following attributes of providers important: providing good product lifecycle management, customer service, the ability to support equipment troubleshooting, the ability to inspect and test equipment and good communication and transparency. Other close-ranking considerations are the ability to view an equipment model and examine its features and the reputation of the equipment provider.

Nearly all buyers (93%) are interested in buying new pharmaceutical processing equipment for formulation and manufacturing of small-molecule pharmaceuticals. A majority (81%) is focused on buying biopharmaceutical-processing equipment, reflecting the changing product pipelines. Also, 87% are interested in purchasing laboratory equipment and 77% are looking to buy fill/finish and packaging equipment.

The Nice Insight Survey focused on three segments of pharmaceutical equipment: processing, bioprocessing and packaging.

For solid-dose processing, tableting and encapsulating equipment are the most widely purchased equipment. Purchased less frequently, blenders, counting equipment, form/fill and seal equipment and high shear mixers are the focus of about one-third of equipment buyers.

For semi-solid dose purchases, mixers/stirrers/blenders, heating and cooling equipment and homogenizing equipment are of greatest interest to buyers. And for liquid doses, filtration equipment is what nearly half of buyers seek.

The most sought-after upstream bioprocessing equipment are incubators, general bioprocessing equipment and mixers/blenders/millers. To a lesser degree, buyers are acquiring cell culture biological shakers, tank equipment, disposable and stainless-steel bioreactors at the same purchasing rate, and disposable bioprocessing equipment.

Half of the purchasing representatives who focus on biopharma products purchase purification and filtration equipment, and fewer buy disposable equipment (39%), separation equipment (38%) and chromatography systems and equipment (36%).

Aseptic filling and sealing/capping equipment for vials, syringes, ampoules and other devices is the leading type of new equipment purchased for primary packaging. About one-third are interested in buying aseptic blow-fill-seal equipment for eye drops, blood and intravenous liquids, as well as unit dose form-fill-seal equipment, inspection systems and product assembly lines for inhalers and patches.

For secondary packaging, nearly half of buyers purchase labelers and printers. About one-third are interested in bulk packaging equipment, serialization equipment, end packaging and tamper-evident solutions.

The rising pace of company consolidation in recent years and changing types of processing and manufacturing has resulted in considerable surplus equipment, driving growth for the used equipment market. Often the equipment can be re-used or repurposed to meet current needs. Selling equipment that is no longer used will typically recover some of the capital expenditure, depending on the type and condition of the machine as well as the cost of removing it. Many companies and contract service providers are turning to highly reputable, reliable used equipment dealers to help them determine the best strategies and provide support for selling and buying equipment.

In the 2016 Nice Insight Equipment Annual Survey, 69% of those involved in equipment purchasing pursue equipment investment recovery primarily for equipment that is out of date, as well as surplus, idle and redundant equipment. The main types of surplus equipment are fill/finish and packaging (41%) and liquid processing (35%), followed by solid dose processing and semi-solid dose processing at 29% each. The top two reasons for surplus equipment are that the machine is outdated or the buyer seeks an upgrade.

Contract service providers have been consolidating and ramping up their capabilities to meet the changing requirements of sponsor companies that are increasingly outsourcing to achieve further cost savings and gain access to specialized technologies and capabilities. Industry companies are seeking service providers with advanced technical capabilities and equipment, greater automation, and the ability to produce potent compounds and controlled substances.

The 2016 Nice Insight CRO and CDMO Outsourcing Surveys[3] saw a big jump in expenditure by pharma and biotech companies for contract services. Most companies spend $51 million to $100 million on outsourcing and another 28% spend more than $100 million, whereas the previous year, the vast majority spent $10 million to $50 million for outsourcing services. And sponsor companies are increasingly seeking longer-term relationships with a service provider, such as a partnership or preferred provider relationship.

One of the emerging trends in biopharmaceutical manufacturing is 3D bioprinting. In the future, 3D printing promises drugs printed on demand, custom doses and unique dosing forms, personalized printed oral tablets and even the creation of living tissue. And cost may no longer be a barrier to producing niche medicines. In 2016, the integrated Tissue and Organ Printing System (ITOP) was introduced, where scientists were able to grow a human structure in the shape of an ear. To make the ear functional, the investigators engineered microchannels to help guide nutrient flow and mimic the function of a vasculature network for printed cells.[4] Imagine if the promises of this technology become reality in a decade or more; how will it impact pharmaceutical manufacturing and equipment — and patient treatment?

1. The 2016 Nice Insight Pharmaceutical Equipment Annual Study.
2. Langer E.S., “4 Key Trends in Biopharmaceutical Manufacturing in 2016.” Bioprocess Online. Mar 16, 2016. http://www.bioprocessonline.com/doc/key-trends-in-biopharmaceutical-manufacturing-in-0001.
3. The 2016 Nice Insight Contract Development & Manufacturing Survey, The 2016 Nice Insight Contract Research - Preclinical and Clinical Survey.
4. Hernandez R., “Visions for the Future of Biopharma Manufacturing.” PharmaceuticalTechnology; 40 (5): 22-29. May 2, 2016.

To learn more about Nice Insight and individual annual studies mentioned in this article, visit www.niceinsight.com.

About the Author

Nigel Walker | Managing Director