Pharmaceutical companies have been outsourcing the production if ingredients from US production companies to Asia. However GMP Consulting firms have seen a shift back to US based production companies. This article will discuss some of the reasons behind the shift back to US production bases.
When pharmaceutical companies decided to move the production if Active Pharmaceutical Ingredients (APIs) to Asia, they thought they would be getting a good deal on price. Production costs like labour and premises rent is better value than in the US. However, hidden costs in terms of logistics and communication are making this outsourcing more expensive than they expected.
Quality Issues
The US has been scrutinising the quality of Asian-produced drugs since the contaminated Heparin affair last year which saw death and serious illness across the nation. And we have seen a bigger demand for quality products made on American soil from consumers, healthcare professionals and the pharmaceutical companies. Quality is stringently measured by the FDA so GMP regulations have to be met by US based manufacturers.
Logistics
The logistics behind outsourcing part of the drug production to a country on the opposite side of the world are massive and expensive. And now the pharmaceutical companies are truly beginning to realise the true cost of this outsourcing. There are costs for employing solicitors, for hiring offices and for travel. These expenses on top of the other complications that are involved in oversees outsourcing can add up.
Communication Problems
When you outsource products overseas, communication is often the most complicated factor. It is hard to convey technical messages in foreign languages never mind everyday conversations. Manufacturers also need to factor in the time it takes for communication to occur between two different countries which are in a different time zone. You are putting your company at a poor position when you have to wait for time zones to align in order for you to be able to communicate with your suppliers abroad.
Now that the production of APIs has been outsourced to Asia for a number of years, the massive financial windfalls that companies expected have not proved to be realistic. GMP consultants are seeing that companies can make a bigger profit by guaranteeing their customers high quality drugs that comply with FDA and GMP regulations.
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