Making pills the smart way

Despite its high-tech image, the pharmaceutical industry is less adept at manufacturing than you might expect, suggests an article in the May 3, 2004, online issue of Business Week.

The Food & Drug Administration recently found hundreds of quality violations at drug companies, and some contend that these woes are a symptom of a deeper problem: factory processes so antiquated that companies typically can't even pinpoint the causes of snafus.

Manufacturing may have become the poor stepchild of the pharmaceutical industry, but now, that stepchild is getting the attention it deserves.

Jackson A. Nickersonof Washington University's Olin School of Business and Jeffrey T. Macher of Georgetown University's McDonough School of Business are leading an effort to find and correct flaws in drug-manufacturing practices and in FDA regulations. The FDA itself is altering its rules, hoping to foster more innovation in factories. And companies such as Pfizer Inc. (PFE ) and Abbott Laboratories (ABT ) are spending tens of millions a year to install new technology and processes in plants.

The potential economic gains of a quality boost are huge: "Everyone has said that costs could decline by up to 50%," Nickerson says. That would save scores of billions of dollars. The new approach would also make manufacturing more flexible, making it easier for companies to produce the personalized treatments that are expected to become common in the future.

•	Making pills the smart way Drugmakers are revamping factories to save money and avoid production mishaps Business Week, Monday, May 3, 2004 Byline: John Carey and Second Byline