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CECON Blog

This area of the website contains blogs written by our Consultants as well as Cecon personnel

5 Reasons Pharmaceutical Companies are Missing out on Significant Cost Savings—Cost Control Strategies for Pharma Part 1

 

Many pharmaceutical companies look at cost controls as a means of bolstering their bottom line in the face of increasing competition and external pressures to reduce the price of medications. Yet many struggle to identify and implement significantsavings. CECON consultant 1569, specializing in the formulation, manufacturing,  packaging, and dosage development of pharmaceuticals , lays out the top five reasons why.  Next week, in Part 2 of this series, we’ll provide a personal example of leading a pharma company to significant cost savings.

 

 

  1. Reluctance to make changes that might create risk

Pharmaceuticals is a highly regulated industry that requires companies to use approved grades of raw materials and components in processes which must be validated and employ qualified equipment systems and facilities. Additionally, raw materials, components, intermediates, and finished products must be analyzed and released using sophisticated, qualified instrumentation and validated methods. It takes years and millions of dollars to conduct the studies necessary to establish these levels of control before a company is authorized to sell a product. Consequently, companies are reluctant to make changes that might risk the quality and commercial availability of their products.

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Case Study: A New Design for a Water-Cooled Furnace Brings to Life the Concept of “Conservative Innovation”

When a CECON consultant specializing in chemical and process engineering presented his idea for a new design for a water-cooled furnace to the expert designers he worked with they said one word: IMPOSSIBLE.  But employing his concept of “conservative innovation design,” he persisted and built a furnace that not only operated successfully, it became far more practical to maintain and repair than the traditional design.

 Over the course of five years, I have built and operated a total of seven rotary induction water cooled furnaces—giant furnaces capable of processing hundreds of tons of ore per hour—in two different factories.  

 When No. 6 was running, my electrician, who I had been working with since No. 1, came into my office and declared: “We must get rid of this water cooling nuisance. You must make an air-cooled coil!” He had a point. Water leakages and sometimes blocked water passages, created safety risks, demanded problematic repairs and consequently caused lengthy down time of the furnaces.

 I immediately responded: “Our furnaces are not the first in the world. If this were possible, the Chinese experts who supplied the equipment would have done it long ago. Forget about it! We have enough on our hands.”

 He was disappointed, but he understood my point.

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