API Outsourcing And GMP Consulting

In the past decade, many pharmaceutical companies have outsourced ingredient production to Asian countries including China and India in the hope of lowering production costs and increasing profits. But now GMP Consulting firms are seeing companies move this production back onto US soil. In this article some of the reasons for the Asian outsourcing failure will be discussed.

Pharmaceutical companies were looking for cheaper costs and bigger profits when they moved the production if Active Pharmaceutical Ingredients or APIs to Asia. This was to take advantage of the cheaper labour and rental costs that they could not get in the US. Pharmaceutical companies thought that these low costs would be enough but there are hidden costs which are making outsourcing more expensive than expected.

Quality Problems
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. Because of this, US citizens, healthcare professionals and pharmaceutical companies are demanding higher quality ingredients that are made in the US. US manufacturers are forced to produce ingredients of the highest quality because they are subject to thorough GMP regulations.

Logistics
The logistics behind outsourcing part of the drug production to a country on the opposite side of the world are massive and expensive. The costs of this are now hitting home. Translators have to be employed, offices have to be rented or bought and employees from the US have to frequently travel to their oversees partners to check on progress. This can all get very complicated when you consider them alongside all of the other issues that foreign outsourcing creates.

Communication
Translation is often the most difficult factor to overcome when you use a foreign company to produce ingredients. And when you can barely get through a daily conversation without becoming confused, how are you supposed to clearly convey technical information. Pharmaceutical companies also need to take into account the different time zones that the continents are on and this will slow down communication. 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.

Pharmaceutical companies have not seen the high profits that they expected to see after outsourcing their ingredient manufacture to Asia. It seems that by producing quality products in the US can be more profitable as your customers will trust the quality of your products more.