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Investing Time to Make Money: A PAT Implementation Perspective (continued)

Some thoughts about ROI All PAT treatises include discussions about ROI. Managerial accountants define ROI as net income divided by total assets (5). The five-year PAT program outlined in this article involves significant capital expenditures, meaning that total assets increase. Net income increases only when product hits the market and generates a revenue stream. It is important to realize that ROI is a better measure of performance than profit because it recognizes the assets required to achieve that profit. The pharmaceutical industry is accustomed to making huge expenditures before realizing income, let alone profit. The industry trade association, Pharmaceutical Research and Manufacturers of America (PhRMA), claims that $1.7-billion in expenditures are needed to bring a new drug to market. In light of this figure, expenditures for a PAT program are relatively modest and have less risk associated with them. PAT simply increases asset usage to the extent that product time-to-market and delivery consistency are dramatically improved. Parallel fast-tracking A five-year plan to implement full-scale production using PAT measurement and control technology is reasonable and safe. Success depends on forethought, planning, staff availability, and dedicated fiscal resources. But what happens if some elements simply aren't available? Upon closer look at the five-year plan, it is clear that the definitive effort occurs in years one and two, with the transition to scale-up and production evolving after that. Outsourcing is the norm in the pharmaceutical industry—contract research and manufacturing organizations and the like are mature to the point that they even have their own technical journals. Why not consider using a contract process development organization (CPDO)? They exist in the PAT world but their credentials vary. It's your responsibility to investigate them and to define a scope for your program. If you elect to use a CPDO, be sure that the contract provides a turnkey solution, complete with validation documentation and training. Insist on oversight authority and milestone definition—with penalties. If you do your homework, a CPDO can lop a year or two off a PAT implementation program. Help is at hand Forming a PAT team, managing diverse technical points of view, and accommodating everyone's unique driving forces can be demanding. An ambitious five-year plan doesn't leave much time for the team to get up to speed. Hiam's The Vest-Pocket CEO (6), is a good source for to-the-point guidelines and metrics for almost any situation. Now, it's time to stop reading and get busy with your PAT program. Best of luck. Acknowledgments The author thanks Arthur Mateos, PhD, of Merck & Co., Inc.; Su-Chin Lo, PhD, of Barr Laboratories; Gurav Walia of Forest Laboratories; and Colin Minchom, PhD, of Patheon Inc. References US Food and Drug Administration, Guidance for Industry: PAT—A Framework for Innovative Pharmaceutical Development, Manufacturing and Quality Assurance (FDA, Rockville, MD, Sept. 2004) http://www.fda.gov/cder/guidance/6419fnl.htm. A. De Palma, "Drug Makers Take Aim at Variability," Pharm. Manuf. Jan. 2004, 23–29. B. Japsen, "Pfizer Announces $4 Billion Cost-Cutting Plan," Chicago Tribune, April 6, 2005. A. Shanley, "Right the First Time," Pharm. Manuf. June 2004, 37–39. J.K. Shim, J.G. Siegel, and A.J. Simon, The Vest-Pocket MBA (Prentice-Hall, Englewood Cliffs, NJ, 1986). A. Hiam, The Vest-Pocket CEO (Prentice-Hall, Englewood Cliffs, NJ, 1990). PT