There are many reasons why pharmaceutical companies outsource services to contractors, from complementing manufacturing and packaging processes tocreating custom-designed added value for the long-term future.
There is a growing trend for companies operating in the pharmaceutical and healthcare industries to create more value from their supply chain through the use of contract manufacturers and packagers. This is a trend that makes perfect sense for a number of reasons, according to Ludwig Bastiaansen, managing director of Enestia Belgium, a contract manufacturing and packaging solutions company.
Acquired by Ireland-based United Drug plc in 2007, Enestia Belgium provides a full range of contract manufacturing, packaging and supporting services to the pharmaceutical and healthcare industries. The company focuses on four specialist lines of mixing and packing business: hormone, healthcare, pharma and probiotics.
'We have five production areas with dedicated setups for each,' explains Bastiaansen. 'Segregation between the areas prevents cross-contamination, and within those areas there are cleanrooms and equipment specific to particular clients.'
Increasingly, companies in this sector are realising that they can obtain more value from their businesses by working with commercial partners such as Enestia.
'The first decision that a medium- to large-sized company has to make is whether or not to keep everything in-house,' says Bastiaansen. 'As the lifetime of products becomes increasingly shorter, those companies are deciding that they want to focus on the R&D and the marketing of their products. Manufacturing and packing is not always the most productive part of the supply chain for them to concentrate their efforts on. So they face the basic make-or-buy decision: "Do we want to have our own infrastructure or shall we go to a third party who can do this for us?"'
While cost plays a major part in many outsourcing decisions, it is not always the driving factor. One of the biggest drivers, says Bastiaansen, is having a dedicated set-up available.
A good service provider also releases the company from worrying about areas such as regulatory and quality issues. For example, if a firm is dealing with dietary supplements, an outsourcing business such as Enestia would adhere to good manufacturing practice guidelines, which are designed to make sure that the product being manufactured has the identity, strength, composition, quality and purity that it claims to have.
Enestia complements the other businesses that are part of United Drug's supply chain services outsourcing capability, says Bastiaansen. These include a UK company that focuses on small runs with high flexibility, and a facility in Holland, where 70% of activities are related to generic products, using identical production lines where only the blister size might be changed.
Enestia's specialist area is tailored production. 'The majority of our business is custom design,' says Bastiaansen. 'We do not work like some of our competitors who use standard equipment doing standard packaging. We have a custom-design set-up; you cannot buy these products off the shelf. We back that up with a large engineering crew.'
Perhaps one of the most important factors for a successful outsourcing relationship is, according to Bastiaansen, a focus on the mid- to long-term benefits, not just the short term.
'A big factor is the reliability of your partner,' he says. 'When you take a decision to outsource you should be looking for a long-term relationship, and asking questions about the prospective partner's track record and whether the investment is really dedicated. If it is a dedicated investment, then both parties have an interest in making sure that the arrangement and relationship work successfully for as long as possible. 50% of our business is under contract for between five and ten years. That shows that we understand the value of developing long-term relationships with our partners.'
Enestia Belgium began business in 1959 as a packaging business. Its product range covers blistering branded and generic drugs, pre- filled syringes and small medical devices.