Reduce costs by outsourcing ampoule production

As regulatory requirements increase, market prices fall and production costs increase, sterile ampoule manufacturers have realized that it is far more cost-effective to outsource production

The regulatory requirements for sterile products have become much more stringent over the last ten years and much more expensive to comply with.

It was expected that this would have caused an increase of the market price of sterile ampoules.

On the contrary, the price has been constantly decreasing whereas production costs have been increasing dramatically.

The main reason to justify the decrease in the price is that there are very few new product introductions with 90% of the sterile ampoules on the market being mature products which are very often generics.

Reducing the price is the only way to remain competitive and increase sales volumes.

Due to the low price and the high production costs, there is no profit margin for pharmaceutical manufacturing companies with a yearly sterile ampoules production of less than 20,000,000 pieces.

In the case where ampoules need to be produced in different filling volumes, low production levels not only jeopardize profitability but also result in tangible financial losses.

The Effects of the New Regulations on Production Costs.

The production of injectable ampoules must take place in a sterile environment.

Under the latest regulations, the certification of sterile rooms needs to be conducted at least once a year.

The number of controls required has increased considerably.

It has been estimated that the time required for each certification averages two days per room and the process costs are around 5,000euro per room.

Certification has to be completed each time by several media fill tests.

One batch of media fill tests could cost as much as 10,000euro.

Requirements for the continuous monitoring of the filling rooms have also become stricter.

The installation of particle counters near the filling point is very expensive and not always compatible with the room's design, particularly in older premises.

Certification of the monitoring system is also very difficult, costly and time consuming.

An efficient monitoring system costs around 50,000euro to obtain and incurs maintenance costs of at least 5,000euro per year.

As regards the clothing worn in sterile rooms, the financial burden of adhering to the relevant regulations is so high that pharmaceutical manufacturers need to outsource cloth management to a specialist contractor.

Each cloth can only be used once and requires changing at each entrance in the sterile room.

This means that for each eight hour shift, each operator needs to change cloths at least twice.

As a result, the cost of cloths for each individual operator is estimated at 5,000euro per annum.

Operators working in sterile rooms need to be specially trained and their training needs have to be evaluated using a media fill test.

Training sessions have to be periodic and should take place at least once every year.

Each operator has to be medically monitored and his sterile technical know-how in the use of in-process microbiological controls is also monitored continuously.

Consequently, this results in increased costs estimated to be as high as 15,000euro per year.

Regulations stating the specifications of water used for cleaning the materials that come in contact with the sterile products during production, have changed.

Only water for injection (WFI) is permitted, resulting in all ampoule producers being obliged to modify their installations to operate with WFI.

WFI or High Purified Water is also required in the washing machines that clean the empty ampoules.

The introduction of these new regulations led to the installation of new water treatment systems and the introduction of qualification processes which significantly increased costs to more than 300,000euro for companies involved in ampoule production.

Furthermore, regulations have led to an increase in the cost of water for pharmaceutical applications to around 100euro per m3.

This is very significant as the washing machines used in this process typically use around 1m3 of water per hour.

In 2006, new specifications were introduced on decontamination products.

Companies have to complete a new certification for each new product.

This type of certification is expensive and requires the production line to be stopped.

Moreover, there are also new requirements introduced covering the cleaning validation of sterile products.

Sterile ampoule producers have to be equipped with high performance optical control machines that, together with their qualification, cost around 1,000,000euro each.

Validation of the machines is undertaken product by product using the Knapp test method, which compares optical control results carried out by the machine as well as by the operators.

A Knapp test costs at least 6,000euro per product.

There are also new specifications introduced for leak tests on ampoules, which traditionally performed in the autoclave by a vacuum test.

This test is considered as an insufficient method today and laboratories have to use automatic pinhole detectors, which are very expensive and difficult to qualify.

The installation of such a machine costs at least 100,000euro.

It is expected that in the future pre-printed ampoules will be forbidden, meaning that only labeled ampoules will be allowed on the European market.

Companies will have to invest in labelling solutions.

This is estimated to be very costly, especially for companies producing several ampoule sizes.

Companies which produce sterile ampoules need to have a microbiological laboratory for sterility tests and microbiological IPC (in process controls).

The daily maintenance of these laboratories is very expensive and requires them to be amortized.

In order to comply with all the new regulations detailed above, ampoule manufacturers are expected to pay costs of around 4,000,000euro for the initial investment and another 400,000euro per year for maintenance.

For a company that produces fewer than 20,000,000 ampoules per year, the impact of these costs on the price of a single ampoule is around +40%.

This increase is amplified by the fact that a single filling line is capable of producing around 50,000,000 ampoules per year.

When producing 20,000,000 ampoules per year, the production line does not run on a daily basis and never during the night even though the costs are running 365 days and nights per year.

The intermittent use of the production line and the new sterile requirements increase the price of a single ampoule by around 150% to 200%.

The only way for a company which produces less than 20,000,000 ampoules per year to be profitable is to focus their activity on sales and marketing and to outsource their production to a specialist company such as Cenexi.

The Right Contractor.

An expert outsourcer such as Cenexi should be able to fulfill a number of required specifications.

Firstly, the ampoule producer must be able to produce a high volume of ampoules each year including overnight production.

This will ensure that all production costs are amortized on a large volume meaning that the impact of any new regulations on the price of a single ampoule will be minimised.

In addition, a proficient contractor must have invested in an effective validation process, which will help achieve and maintain regulatory compliance.

Outsourcing contractors should also be capable of producing all ampoule formats ranging from 1ml to 25ml.

These formats represent 99,9% of the ampoules available on the market meaning that the ampoule production contractor is capable of producing a complete client portfolio on a single site.

There are many small to medium sized pharmaceutical contractors which are well positioned to meet all these requirements, but it is far easier for contract manufacturers like Cenexi which is allied with a strong financial backing company with access to proven experience and expertise, to do so, which helps the contractor to keep pace with the latest market and regulatory developments.

Summary.

As regulatory requirements become more stringent, market prices fall and production costs increase, sterile ampoule manufacturers have realized that it is certainly far more cost-effective to outsource production to an expert contractor rather than to upgrade or replace their aged plants and operations.

Choosing the right contractor can be a difficult and time consuming task.

Yet there are certain requirements that the contractor must fulfil and which can act as a useful guideline to making the most appropriate choice - a high production capacity, effective validation processes, the capability to produce all ampoule formats and long-term financial stability.

For contract manufacturers, it means fully understanding the requirements of the drug owners and aligning their operations to enable them to constantly strive for improvement and innovation.

Article provided by Philippe Mougin, Managing Director, Cenexi.

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