By Emil W. Ciurczak, Contributing Editor

Anyone who routinely reads my doggerels knows I love irony. A favorite example concerns Linus Pauling. The great scientist received his Nobel Prize for his “Nature of the Hydrogen Bond.” Years later (1950’s), while rushing to beat Watson and Crick in publishing the structure of DNA, he made the wrong structure. Why? He forgot the key lessons that he had learned about hydrogen bonding! Delicious irony, no? We often make decisions with no regard to history or the future.

What, you may well ask, does this have to do with PAT and QbD? I’m glad I made you ask. When we age, short-term memory is often one of the first things to go. (I remember my wife’s grandmother, who survived to 101, chatting about her youth, but forgetting where she was at that moment.) In rare cases, such as in the pharmaceutical industry, long-term memory seems to be vanishing even more quickly. For decades, the rising cost of discovering NCE’s assured that only companies that grew, either by expansion of mergers, would have the “critical mass” to develop innovating new products.

In the mid-1970’s, I worked for a company (later scooped up by a larger company) that reached $100 million in sales. We cheered as if we had personally made the money. Why? In those days, that kind of money guaranteed that a company would survive. (Of course, the manner in which we grew was to “buy” established smaller companies, transfer the few people who could produce the product of interest, fire the rest, and sell off the property.) Now, of course, $100 million is less than the two-day production of Lipitor at a single Pfizer site. Now, unfortunately, sales for a product under one billion dollars don’t ensure a profit for a large company. The overhead for each person has become higher and higher with each merger.

I remember one supervisor telling me not to bother to clear a blockage in a pipette; it was “cheaper” for me to buy a new one than to take the time to clean one. He explained that it “cost” the company (dividing the total cost of the facility, insurance, benefits, chemicals and instrumentation by the headcount) over $250 an hour for me to do what I did. By that logic, if it took 15 minutes to clean a pipette, it “cost” $62.50, whereas a new one only cost $5!This is the kind of cost analysis that supervisors and lab and plant managers do all the time. There are, after all is said and done, two major ways to cut overhead/operating costs: reduce the sources of overhead (plants, R&D facilities, and bodies), or reduce the cost of production.

Keeping mind the American paradigm of CEO’s achieving their positions near the end of their careers and needing to have a profit this quarter to assure their bonuses and retirement “golden parachutes,” it is no surprise that taking a machete to the company is the preferred option. From what I have read, Pfizer, for example, had 82 sites at its peak of growth. The company just announced another half dozen closures, so I can only guess at how many sites are still active.

This technique certainly adds to the coffers and makes the CFO and CEO look good to shareholders. Concomitant to this approach is the outsourcing of most of the process stream. Very few proprietary companies even synthesize their own API’s any longer. Excipients have always been purchased, but now they are from developing countries (no potential problems there, hey?). In addition, many products are packaged off-site (blister packaging machines are expensive) and even stability testing is increasingly done by contractors (that’s how AAI Pharma began in the 1970’s, after all). With competitive pricing among potential contract sites, costs can be kept at a minimum.

Unfortunately, the contractors make the product in the same manner as it was prior to outsourcing, meaning that a generic house can still sell at a lower price than the originator’s product. So, how does the originator compete at this point? That’s easy: simply employ PAT!

What’s that? You don’t have the people to start a PAT program? You fired them all? And, assuming you can start and establish a PAT program, how do you make the contract suppliers buy, calibrate, maintain, and use the sophisticated equipment needed for PAT? Remember, you chose them because they had low overhead and headcount . . . they are mill, not R&D, sites; buying all the equipment needed for PAT and hiring the bodies needed is not in their purview.

Now we get to the delicious irony: we forgot why we grew big in the first place. We are lean and mean and have virtually no one capable of spending time to make the processes more efficient! And, if we did have the ability, we no longer control our APIs, many production lines, or even our stability ovens. By deconstructing our infrastructure, we have gravely hindered our ability to modernize and streamline our processes.

Has anyone read The Gift of the Magi by O. Henry? Do you see the parallel?

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