As the biopharmaceutical industry undergoes restructuring, its focus shifts to the efficiency of drug development and overall costs of delivering affordable medicines. A question often raised concerns the manufacture of drug substances overseas to tap into a cheaper manufacturing base (1). There are many issues to consider when looking at overseas locations, such as intellectual property (IP), the availability of skilled labor, and the emergence of new markets. The situation is more complex with biopharmaceuticals because the products themselves are difficult to characterize, which means close scrutiny of all systems manufacturing, quality, and supply chain. However there are successful overseas manufacturing companies supplying vaccines through World Health Organization (WHO) programs, and blood fractionation facilities and established biopharmaceutical manufacturing operations are already operating in Cuba, China, Japan, Singapore, and India.

I'm focusing on the economic aspects of biopharmaceutical manufacturing and looking at the influence of geography on them. At my consultancy, 90% of the biomanufacturing models we have built over the past 11 years have been geared to costs in Western nations. But we have been asked to look at the impact of geography on particular biopharmaceutical manufacturing operations in Japan and the purification of blood fractions in various locations around the world. Recently we were asked to present at a conference in South Korea on the financial implications of disposable technologies and the influence of location.

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Using the BioSolve process modeling and cost-of-goods (CoG) platform, we were able to take a “typical” monoclonal antibody process and very rapidly analyze the impact of geographical location on its CoG. The process-driven BioSolve system methodology remains the same no matter the process being configured. It has a large user base, and we know from the feedback we've received that users are confident with this approach and the methods used to calculate CoG. So we can derive a high degree of confidence that outcomes of our assessment are realistic subject to the correct assumptions and data sets being used for analysis.

Case Study

I've used the BioSolve tool to evaluate the individual cost contributions of specific single-use technologies on manufacturing costs, comparing them with stainless steel systems and taking into account regional differences in India, China, the United States, and the European Union. By accounting for scale, we can identify the cost and savings of single-use technologies such as hold bags, mixers, and bioreactors as a function of scale and region. The process is based on a sequence published by Morrow (2).

Assumptions used for this exercise are

• three 2,000-L reactors, 2-g/L titers, and 80% capacity use

• one purification train

• mode of solution make-up (media per batch and buffer per operation)

• basis of costs (materials, consumables, equipment, and so on) for vendors and suppliers, benchmarking information from >10 biotech operations.

To understand the impact of geography, it is necessary to review how we build up the CoG and then evaluate the impact of geography. The cost model is configured as modules in the BioSolve program (from BioPharm Software Solutions, a business unit of Biopharm Services) as in Figure 1 (3). This methodology has the advantage of being scalable, flexible, user-friendly, and transparent. The key modules that directly affect cost are capital, materials, consumables, and labor. When considering each in turn, we can assess the impact of geography on cost and define the assumptions used in the model.

Figure 1: (Click to enlarge)

Capital estimation is based on total equipment purchase costs and total cost factored from that. Based on experience gained from building pharmaceutical facilities in different locations, it is fair to assume that key manufacturing equipment is sourced from the West, so related costs do not vary significantly from country to country. Capital engineering costs (installation, pipework, HVAC, control, electrical, construction, and fit-out) are factored in using benchmarked percentages of total equipment purchase costs. The key variable is construction costs for the building. Some published benchmarks look at the costs of building in different countries (Table 1), and I applied these in my analysis (3).

Table 1: Construction costs for industrial buildings (Click to enlarge)

Materials and Consumables: The bulk of materials and consumables costs are driven by components such as protein A resin, media for cell culture, and filters (Table 2). These are specialized items from specific suppliers that are not easily substituted, so I used the standard Western costs in all cases.

Table 2: CoG cost breakdown for stainless steel option (UK costs) (Click to enlarge)

Labor costs vary according to country. Table 3 lists the actual values I used, based on a number of sources (4,5,6).

Table 3: Salary costs in different countries (Click to enlarge)