In the past decade, many pharmaceutical companies have outsourced ingredient production to Asian countries including China and India in the hope of lowering production costs and increasing profits. But now GMP Consulting firms are seeing companies move this production back onto US soil. The reasons behind the move back to the US are varied and they will be discussed in this article.
Pharmaceutical companies were looking for cheaper costs and bigger profits when they moved the production if Active Pharmaceutical Ingredients or APIs to Asia. The reason is because labour and office space is cheaper than it is in the US. Pharmaceutical companies thought that these low costs would be enough but there are hidden costs which are making outsourcing more expensive than expected.
Problems With Quality
After the deaths and illnesses caused by contaminated Heparin that has been produced in China made its way onto the US market, the quality of drugs made in Asia has been under question. Because of this, US citizens, healthcare professionals and pharmaceutical companies are demanding higher quality ingredients that are made in the US. This is because the premises have to comply with GMP regulations and any issues can be quickly traced.
Logistics
The cost and complexity of logistics when it comes to outsourcing your ingredient production oversees is massive. And now the pharmaceutical companies are truly beginning to realise the true cost of this outsourcing. There are costs for employing solicitors, for hiring offices and for travel. These expenses on top of the other complications that are involved in oversees outsourcing can add up.
Communication
As was mentioned in logisitcs, many manufacturers have to hire translators to interpret all of their communication between themselves and their foreign partners. And when you can barely get through a daily conversation without becoming confused, how are you supposed to clearly convey technical information. Manufacturers also need to factor in the time it takes for communication to occur between two different countries which are in a different time zone. You are putting your company at a poor position when you have to wait for time zones to align in order for you to be able to communicate with your suppliers abroad.
Pharmaceutical companies have not seen the high profits that they expected to see after outsourcing their ingredient manufacture to Asia. In fact, by moving your production back to the US you are filling your customers with confidence of quality and can make bigger profits.
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