Study Finds: U.S. Pharmaceutical Industry Exists Large Space for Cost Reduction
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Undoing unwise production outsourcing
Professor Jack Nixon, a professor at Washington University in St. Louis, is one of the main authors of this research report. He believes that the current production specifications of pharmaceutical manufacturers and the regulations promulgated by the US FDA must be responsible for the waste in the current production process. If these norms and regulations can be effectively changed, the entire industry is expected to save an average of about 15% of production costs.
During the survey of 42 production sites for 19 companies, the researchers found that companies can at least reduce the cost in five areas. They are to increase the use of IT technology in production, change the decision-making too centralized The status quo, the elimination of unwise production outsourcing, the matching of production scale and facility scale, and the adoption of process analysis techniques. If these problems can be resolved well, the pharmaceutical industry may establish new best practices.
In addition, different products, processes, location of production plants, corporate reputation and history, internal organizational structure, and labor enthusiasm are all important factors for whether pharmaceutical companies can reduce production costs on the premise of meeting drug production standards.
FDA does not consider the cost issue?
The influence from the drug regulatory authorities is also one of the important factors in the optimization of production costs. Different FDA corporate inspectors often have different effects on the production of each company. From this point of view, companies are naturally reluctant to risk their violations. To this end, the FDA should also maintain sufficient communication with the company on the basis of risk prevention and improve its work on the formulation of laws and regulations. In the face of looser regulations to ensure quality, companies will also have more opportunities to increase synthetic yields, reduce production cycles and shifts, and thus achieve cost reductions. Indeed, in the past, the FDA considered more of the safety factors in the regulatory process. As for the cost issue, it is often left to the enterprise to solve it. Pharmaceutical companies have also put more energy into the research and development of new products. The issue of controlling production costs has become a neglected factor. However, the results of the study confirm that if FDA and pharmaceutical companies can work together, reducing production costs is not a distant dream. In any case, once the cost of production is effectively controlled, the prices of medicines are expected to decline further, and companies may have more funding for new drug research and development.