A Comparative Investment Analysis of Batch Versus Continuous Pharmaceutical Manufacturing Technologies
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Abstract
Purpose This study examines the risks and economics associated with investing in continuous (CM) versus conventional
batch manufacturing for production of oral solid dosage pharmaceutical (OSD) products in the USA and abroad.
Methods A stochastic net present value (NPV) simulation of brand and generic manufacturing for new facilities is conducted
comparing batch and continuous manufacturing processes leveraging actual industry financial revenue and cost information,
and detailed engineering cost information of batch and CM manufacturing processes from a seminal manufacturing cost
analysis of these two technologies.
Results When looking at comparing investment in either CM or batch for a new U.S. facility, the results clearly suggest that
the lower costs associated with CM technology should lead to both brand and generic companies investing in the more CM
manufacturing technology. The simulation analysis demonstrated that under current U.S. tax rates, investing in batch technology at U.S. sites would be economically more attractive than investing in batch technology in China or India. Investing in
CM technology in the USA under current tax rates results in positive expected net NPVs over batch technology investments
in China or India for both brand and generic companies. U.S. tax policy has a material impact on whether pharmaceutical
companies would decide to invest on the USA or not for their manufacturing.
Conclusions Results indicate that continuous manufacturing has the potential to make manufacturing of OSD pharmaceuticals
more economically attractive in the USA than foreign manufacturing of those products.