by Tommy Fanning, Global Head of Biopharmaceuticals, IDA Ireland
The newest drugs emerging in the market for gene and cell therapy as well as disposables have become the focus area for U.S. bioprocessing firms, many of whom have been moving some production overseas -- particularly to Europe. But while single-use products have advantages in production costs and turnaround time, there are also some challenges for American biopharma companies in choosing their optimal overseas location.
The high cost of building or retrofitting domestic facilities capable of producing such products and the long lead times for receiving and installing equipment have boosted Europe as a production location and the region already has a preponderance of bioprocessing facilities owned by American companies -- for example, a majority of Active Pharmaceutical Ingredient (API) products are being produced there. But all European countries are not alike when it's time to select a location for an offshore single-use operation.
Savvy U.S. biopharma companies should be aware of the issues and have well-thought-out answers before embarking on an overseas single-use bioreactor location. Here are the biggest challenges.
Staffing can be difficult
Staffing is undoubtedly the biggest issue when choosing a European location because across the biopharma and biotech manufacturing sectors, finding appropriately skilled workers is increasingly formidable overseas as well as at home. Process engineers, validation engineers, quality control professionals, laboratory technicians -- these in-demand workers aren't necessarily plentiful in every possible overseas location. And companies must also consider that they will need sales and marketing professionals, supply chain management experts, financial personnel and other workers to support their geographic sales efforts.
In fact, a whole new class of shared-services centers is emerging that focuses on a wide range of services requiring skills outside the usual sphere at the same time that workers are in demand to staff the data analytics functions that are expanding to all elements of the value chain. Thus an optimal overseas location will have a ready supply of professionals with digital and IT skills in addition to the more familiar functions in the biopharma space.
To lessen the staffing research burden, one approach is to find out where your competitors and partners have located because they will have looked at the skilled labor supply before choosing their site. In addition, those companies that moved to Europe before you have probably considered other issues like the cost of real estate, living expenses and other key factors.
A location with alliances between the university, government and business sectors can be hard to find
You'll want colleges in your chosen location to have strong programs in areas like engineering, chemistry, biochemistry and biotechnology, with funding for ongoing research in the biopharma field and evidence of cooperative links or joint ventures with the business sector. For example, GE Healthcare recently donated $2 million for equipment and partnered with Ireland's National Institute for Bioprocessing Research and Training (NIBRT) for a "Single-Use Center of Excellence" that will train up to 1,500 professionals annually. Check to see if such cooperative programs are available in the locations on your short list.
The regulatory environment can have a big impact
In a fast-moving sector like single-use drug manufacturing, regulatory bodies can play an outsized role. Europe is already known as a leader in continuous manufacturing of pharmaceuticals, but many producers are deterred by the need to obtain regulatory approvals for the installation of the digital equipment and systems needed to manufacture such products and the variation among the region's national regulatory bodies. For regulation in general, the European equivalent of the FDA is the European Medicines Agency or EMA. However, each country's own agency will be involved and for American manufacturers, the FDA is the arbiter of what is allowed to be sold in the home country.
Ireland has the advantage of a strong regulatory and compliance culture. The country's Health Products Regulatory Authority (HPRA) is one of the leading regulatory agencies in Europe and works to make sure plants in Ireland remain in an acceptable state of Good Manufacturing Practice (GMP) compliance, with FDA warning letters virtually unknown.
Logistics will play a role in your decision for next-generation products
Logistical issues are critical for the short production runs in clinical trial, single-use and manufacturing for cell and gene therapy in which individually-made drugs need to be produced and given back to a patient within a short time, such as 72 hours. This calls for having a manufacturing facility with close access to clinics, partners, transportation and other elements. In addition, your chosen location should have an integrated process for testing, releasing and launching products built around short turnaround times.
Having a close, reliable supply chain and existing infrastructure were factors that led China's WuXi Biologics to recently announce a €325 million investment for a new biologics drug substance manufacturing facility in Dundalk, Ireland, that will deploy multiple single-use bioreactors for commercial biomanufacturing. Located on a 26-hectare campus, this state-of-the-art operation will be the world’s largest facility with single-use bioreactors.
Single-use technology for pharmaceutical manufacturing has a bright future; BCC Research predicts global sales will reach $3 billion by next year. Many American biopharma companies have expanded their production capabilities overseas to participate in this potentially profitable market. For example, the world's top 10 biopharmaceutical companies have a significant presence in Ireland. But firms like Janssen, Sanofi, Biomarin, Gilead, Abbvie, Lilly, Pfizer, Merck, Allergan and Amgen first did their homework in order to get the most out of their chosen European location.