San Francisco, CA – October 31, 2024 - “The best way to immediately lower drug prices is to lower the cost of manufacturing,” said Ben Davis, the CEO of Phizzle, Inc – reflecting the key takeaway of Phizzle’s study into the levers of cost savings available to pharmaceutical manufacturers.
Phizzle’s market study involved F500 manufacturers representing more than 10% of the critical instruments used globally in drug production. In voice-of-the-customer interviews, Phizzle found most pharma manufacturers can raise production productivity by as much as 25 percent, with the potential for even higher savings.
“The cost of legacy data has put a ceiling on pharma manufacturing productivity,” said Davis. “It is one of the last trillion-dollar markets to be hardware-centric.”
While R&D is typically the largest cost input to a drug’s price, the cost to manufacture a drug can be as high as 30 percent of a manufacturer’s revenues. According to Davis, many of these costs are associated with using pen and paper in an era when most corporate functions have digitized their business processes.
Phizzle’s qualitative market study identified three significant productivity levers to lower the cost of pharmaceutical manufacturing: Cost Efficiencies, Cost Avoidance, and Risk Mitigation. In combination, the levers could impact up to 25 percent of the cost to manufacture drugs if implemented at scale, according to the study participants. Phizzle developed an ROI calculator to help manufacturers understand the potential to drive cost savings using a digital platform like Phizzle’s Digital Air.
In the interviews, the F500 participants identified three areas of savings:
- Cost Efficiencies can be derived from several standard digitization efforts — the removal of paper, the automation of previously manual tasks, expediting data collection and auditing— and led to a subsequent increase in labor force productivity for all survey participants. Key metric: Study participants identified up to 40% labor efficiency savings by moving from paper to digital tools.
- Cost Avoidance was achieved through lowering the failure rate of simple, routine compliance testing. Each failed test triggers an expensive deviation report process. Key Metric: Participants said software solutions can remove human error and lower annual failure rates by up to 60% for manufacturers.
- Lastly, Risk Mitigation is a key incentive in the pharmaceutical industry. Avoiding FDA audits requires staying compliant and proactive in the face of changing standards. Digitizing the 21 CFR 11 process is a required step for all pharmaceutical companies looking to minimize risk and incidence of FDA intervention. Key Metric: Participants suggested an end-to-end digital process could reduce FDA audits by up to 50 percent.
To learn more about how investing in manufacturing technology is saving pharmaceutical companies money and lowering costs, review Phizzle’s ROI calculator for one of the most critical instruments in the industry — air particle counters.
Learn more at www.phizzle.com
