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A Comparative Investment Analysis of Batch Versus Continuous Pharmaceutical Manufacturing Technologies
1Robert H. Smith School of Business, University of Maryland, 4465 Van Munching Hall, College Park, MD 20742 USA.
Continuous manufacturing (CM) offers lower costs for oral solid dosage (OSD) pharmaceuticals, making it a preferred investment over batch manufacturing. Investing in U.S. CM facilities is economically superior to foreign batch production, influenced by tax policies.
Area of Science:
- Pharmaceutical Manufacturing
- Chemical Engineering
- Supply Chain Economics
Background:
- Conventional batch manufacturing is standard for oral solid dosage (OSD) pharmaceuticals.
- Continuous manufacturing (CM) presents an alternative with potential economic and efficiency benefits.
Purpose of the Study:
- To evaluate the economic risks and viability of investing in continuous manufacturing versus batch manufacturing for OSD products.
- To compare these manufacturing technologies for both brand and generic pharmaceutical production in the USA and internationally.
Main Methods:
- A stochastic net present value (NPV) simulation was employed for new facility investments.
- The simulation utilized actual industry financial data and detailed engineering cost information for both batch and CM processes.
Main Results:
- Continuous manufacturing (CM) is economically favored over batch manufacturing for new U.S. facilities due to lower associated costs.
- U.S. tax rates make domestic batch manufacturing more attractive than overseas batch production.
- Investing in U.S. CM yields higher expected net NPVs compared to foreign batch manufacturing investments for both brand and generic companies.
Conclusions:
- Continuous manufacturing (CM) can enhance the economic competitiveness of U.S. pharmaceutical manufacturing for OSD products.
- U.S. tax policies significantly influence decisions regarding domestic versus international pharmaceutical manufacturing investments.
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