Keynote Presentation on the pharmaceutical industries PAT -- Process Analytical Technology -- Conference

1. ISA’s Food and
Pharmaceutical Division
2nd
Process Analytical
Technology Conference
May 16, 2006
Standards
Certification
Education & Training
Publishing
Conferences & Exhibits
By Mike Nager

2. Source: ISA Roster
ISA’s Food and Pharmaceutical
Division – Key Benefits
Over 1600 automation professionals in the
Pharmaceutical, Food, and Packaged Consumer
Products fields.
Key issues of validation, PAT, packaging safety,
aseptic processing, clean rooms, cGMPs. Also:
• Peer and Business Networking
• Education and Professional Development

3. Spain, 13
Canada, 11
China, 7
Mexico, 6
Japan, 56
USA, 233
Germany, 29France, 27UK, 19
Italy, 18
Source 2/2005 Scrip Magazine
$608B World
Pharmaceutical Market

4. 75% → Pharma revenue to face generic competition
(Datamonitor)
70% → Drugs that won’t recoup development costs
(PHRMA)
40% → Equipment Utilization Rate (FDA)
25% → Manufacturing costs as part of revenue (FDA)
18% → Pharma profit margin vs 4.5% for CPG (FDA)
15% → Utilization level of manufacturing cap. (FDA)
5-15% → Scrap Rate(IQPC) @ $3.5M/batch(AMR)
Pharmaceutical Industry
Where are we today?

5. (IBM)
Room to Improve

6. 0 2 4 6 8 10
Cox-2 Inhibitors 1999
Invirase 1995
Rocombinate 1992
Difulcan 1990
Mevacor 1987
AZT 1987
Seldane 1985
Prozac 1985
Capoten 1980
Tagemet 1977
Inderal 1968
Top Line Pressure from Competition
& Generics – End of the Blockbuster
(PWC Consulting)

7. $49B → 2004 R&D Spending (PHRMA)
$25B → ’00-’04 Lost Revenue Patent expiration (Forrester)
$15B → 2005 Lost Revenue Patent expiration (Forrester)
$30B → Lost Revenue due counterfeiting (WHO)
$16B → 2005 Free Samples (PHRMA)
1.2B → Average number of records per company (IMS)
Bottom Line Erosion
Profits under Pressure

8. 0
1000
2000
3000
4000
5000
6000
7000
8000
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
Just one added cost:
Pharma Direct to Consumer Advertising
Business Insights

9. 200 → Days of inventory in pharma supply chain (AMR
Research)
60 → Days of inventory in CPG supply chain (AMR
Research)
25 → Average number of transfer points in supply
chain between manufacturer and consumer (IMS)
Pharmaceutical Industry
Numbers

10. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2σ 3σ 4σ 5σ 6σ
Yield
Cost of Quality
Quality and the
Cost of Quality
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2σ 3σ 4σ 5σ SEMI 6σ
Yield
Cost of Quality
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2σ PHARMA 3σ 4σ 5σ SEMI 6σ
Yield
Cost of Quality
(PWC Consulting)

11. 74% → Execs who believe the need to improve
operational excellence is paramount (MBT Magazine)
$12.5M → Amount a $5B pharma company will save
by reducing manufacturing costs 1%( MBT Magazine)
$4.6B → Savings of top 10 pharma companies if
improved from 2.5 Sigma to 5.5 Sigma (faster to market,
faster inventory turns and capital cost reductions) ( Phillipe Cini, Tunnell Consulting)
$10B → Savings top 30 companies would save by
achieving 4.5 Sigma (IBM)
Savings Potentials

12. Manufacturing Defects
Cost more than just lost batches!

13. It’s been done before!
(IBM)

14. It’s a system to understand and control
the manufacturing process, which is
consistent with our current drug quality
system: quality cannot be tested into
products; it should be built-in or should
be by design.
Source: FDA
Why Process Analytical
Technology?

15. ISA has the expertise to help
pharmaceutical and biotech companies
increase manufacturing efficiencies to
meet today’s market challenges of
increasing costs and downward
pressure on sales.
Conclusion

16. • Process Analyzers and sensors to provide
process ‘signatures’
• Process Control used to ‘steer’ final products
towards their desirable end-points
• Multivariate mathematical tools for simulation,
statistical design, pattern recognition
• Knowledge Management for continuous
process improvement
The Four Tools of P.A.T.
Now Alex Habib will introduce P.A.T.