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Development and Application of a Business Case Model for a Stream Sampler in the Pharmaceutical Industry

By Fontalvo-Lascano, María A; Alvarado-Hernández, Bárbara B.; Conde, Carlos; Sánchez, Eric J.; Méndez-Piñero, Mayra I.; Romañach, Rodolfo

Published on CMKC

Abstract

Purpose: A template to prepare a business case for Process Analytical Technology (PAT) and Continuous Manufacturing (CM) projects is presented in this study. Business cases are necessary tools used in different organizations to present new projects for management evaluation. As new ways of working under PAT and CM constitute a significant investment of capital, time, personnel, and other resources, a solid business case will facilitate the organization, presentation, and justification of these innovative strategies to management for their evaluation. The authors understand that this is the first study that considers the implementation of PAT in a specific manufacturing facility, including potential tax benefits associated with the manufacturing location. Methods: A financial analysis template was used to develop a business case for an innovative stream sampler for pharmaceutical powder blends. The business case financial model included the capital investment and associated costs for implementing this powder sampler. The case study modeled three different potential tax benefits modalities. The definition of the financial model parameters, assumptions, and constraints are followed by the recommendations of pharmaceutical industry leaders and tax advisors. Results: The financial model provided the evaluation of the listed relevant costs and benefits. The analysis evidenced a significant influence of tax incentives on the economic evaluation. As a result, the financial model estimated a net present value (NPV) range of $420,957 to $578,896, an internal rate of return (IRR) with a minimal of 65% and a maximum of 89%, and a return of investment (ROI) of 82 to 133% for the proposed PAT investment. The most significant benefits representing additional savings between $14,157 and $234,157 per year were presented applying the tax incentives. Conclusion: The PAT Business Case template facilitates evaluating different scenarios, costs, and benefits for a proposed project. Each company may adopt the business case model according to its cost structure and manufacturing processes. The tax benefits contribute further to this case study, especially the super deduction, followed by the R&D tax credit. Furthermore, the tax incentives effects can be evaluated by entering the input data without an additional step in the business case template.

Journal

Journal of Pharmaceutics Innovation. Volume 18, 2023, 182-194

DOI

10.1007/s12247-022-09634-0

Type of publication

Peer-reviewed journal

Affiliations

  • University of Puerto Rico at Mayagüez
  • CIS International LLC
  • Scientia Natura

Article Classification

Research article

Classification Areas

  • PAT
  • Oral solid dose

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