US Pfizer to increase drug product outsourcing

27 June 2008 21:47  [Source: ICIS news]

By Clay Boswell

NEW YORK (ICIS news)--US producer Pfizer will increase its outsourcing of active pharmaceutical ingredients (APIs) and finished drugs over the next few years, largely as a result of ongoing plant divestitures, an executive said on Friday.

Pfizer, the world’s largest pharmaceutical company, has closed or sold 45 of its manufacturing sites since acquiring Pharmacia in 2003.  

Pfizer now operates 55 sites, but the total will be reduced to 43 by 2010 at the latest, said Anthony Maddaluna, a vice president in the company's global manufacturing division.

The division outsources 16-17% of its manufacturing needs, based on costs, but that volume will rise to about 30% within three years, Maddaluna said.

“Of the 30%, it’s important to note that 65% of it will be sites that we’ve sold with supplier agreements,” Maddaluna said.

“It doesn’t mean they’re going to have that work forever. They have to be competitive going down the road," he said.

"And that’s competitive not only on costs," he said. "It’s also quality and supply reliability.”

At the same time, the division’s strategy is to minimise the number of contract manufacturers, which now stands at slightly more than 200, he said.

Although industry observers have speculated on the possibility that pharmaceutical companies could outsource all of their production needs, Maddaluna said Pfizer will not.

“We need internal manufacturing [resources in order] to co-develop and launch new products jointly with research; to improve processes and extract value throughout a product’s lifecycle; and, obviously, to ensure quality and compliance,” Maddaluna said.

However, internal sites must be competitive with their competition, he noted.

“It’s all about a competitive global supply network,” Maddaluna said.

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