Why Pharma Execs, Not Just Engineers, Should Attend ISPE
By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL
This year’s International Society for Pharmaceutical Engineering’s (ISPE) annual meeting was held in Washington, DC (November 3 – 6). If you are a pharmaceutical executive, you might think this show could be of little value to you, to which I say, “Oh, really?” Being my first time at the event, I sat in on sessions which I know would be of interest to execs. For example, during the asset reduction session on Sunday, Bill Weiderseim of Pharma Bio Source shared examples of plants and facilities that were built and today are either what he considers to be unsellable, or if they sell, it is often for pennies on the dollar — some having never been used. Gil Medina, EVP at CBRE, New Jersey’s largest commercial real estate brokerage firm, stated the importance of having the end in mind. In other words, you should have a plan on how to sell a building before you build it.
Think Sell Before You Build
Medina, who previously served as the NJ secretary of commerce, has watched the impact of the failure to plan with the end in mind. Just this past month, Merck put up for sale its hexagonal-shaped, million-square foot, Whitehouse Station global headquarters. Built in 1992, the 1,000-acre complex includes some unique amenities, such as basketball and tennis courts, a ballfield, and helipad. Built in a rural setting, the closing of the complex represents an example of a trend Medina describes as the death of suburbancentric, automobile-dependent office parks. According to Medina, millenials don’t want to drive, and as such, employees of the future will desire to work in facilities close to urban centers and mass transit and that are designed in ways which represent a community as opposed to a complex. As a result, Whitehouse Station is more likely to have a second life as a posh resort like that of the Greenbriar than an industrial hub. Perhaps another company might require a facility this large. But with the anticipated trend of 50 percent of the U.S. workforce to be functioning as independent contractors by the year 2020, it is more likely that the global HQs of the future will need to be on a much smaller scale. Though the decision to sell and consolidate by Merck is anticipated to save the company billions, imagine the domino effect of the loss of 2,000 high paying jobs leaving the Whitehouse Station area, and the impact on the local economy and tax base. It is unlikely the folks at Merck had any plans for how they would sell the complex when it was being built. I often wonder why we would take this approach in industry, when we would never buy or build a home without considering the future of how to sell it. One of Medina’s ideas is for pharma companies to take an equity stake in the redevelopment of its properties. Though pharma companies might not want to get into the business of real estate, perhaps it would be financially wiser to do so.
What Is The Real Cost Of Bringing A Drug To Market
In a Forbes article in August, 2013, Matthew Herper pegged the cost of creating a new drug at $5 billion. But what really is the cost of bringing that drug to market? During the ISPE plenary session, Julie Kim, general manager of BioTherapeutics, Baxter Healthcare (NYSE: BAX), provided some additional insight around the costs and challenges involved in helping patients. For example, primary immunodeficiency (PI) disorders are often treated with immunoglobulin therapy (IG), which requires plasma donations. During the plenary session at ISPE, Kim explained that it takes 130 plasma donations to treat one PI patient for a year. To donate, one must go through a screening process, and those donors are often compensated. So here is another cost of $20 to $50 dollars per donation to add to the cost of bringing plasma drugs to market. But the real cost for Baxter is its investment in building a $1 billion manufacturing facility in Covington, GA. The facility, which is located about 30 minutes east of Atlanta, will create 1,500 jobs in the area when it finally opens in 2018, and is designed to alleviate the capacity-constrained business of making plasma therapies. Though I am tempted to ask the executives at Baxter if the cost of building the Covington Plant should be factored into the cost of developing a new drug, the real question I have after attending ISPE is, before you started building it, did you have a long-term plan for how you would sell it?
FDA + FOYA = Packed House at ISPE
At this year’s ISPE, I ran into two people who previously were on the cover of Life Science Leader and who work at the FDA – Jeff Baker and Janet Woodcock. When I interviewed Baker in 2012, we talked about the importance of gaining alignment between industry and regulatory. For Woodcock, this means gaining alignment on quality. During her plenary presentation before a crowd of 1,600, she announced the FDA will undergo a re-organization next year. A primary focal point of this re-org is the creation of the office of pharmaceutical quality (OPQ). According to Woodcock, manufacturing has become the rate-limiting step to the success of the breakthrough therapy designation. Further, she noted that if the FDA doesn’t modernize to keep pace, GDUFA will fail. Her goal is to create a culture of high-quality drug manufacturing with minimal regulatory oversight so industry has the freedom to operate and innovate.
Speaking of innovation, six companies were recognized as category winners during the Facility of the Year Award (FOYA) announcement ceremony — Biogen Idec, F. Hoffman – La Roche, MedImmune, Merck, Morphotek, and Novartis, which took the top prize as the overall winner with its United States flu cell culture facility. If you are a pharmaceutical executive, next year’s ISPE annual meeting should be on your radar, because the educational content of this meeting delves into problems that require more than just the minds of engineers to solve.