Ireland is a major world player in the manufacturing of pharmaceuticals and bio-pharmaceuticals. Of the top 15 companies in this sector internationally, 13 of them have significant operations in this country with a large proportion of them located in Munster and the Cork region in particular.
According to Enterprise Ireland figures, a total of 83 overseas companies are located here operating some 126 plants, employing 17,000 people and exporting €33bn of products each year. This makes Ireland one of the largest exporters of pharmaceuticals in the world.
As a result the pharmaceutical sector is an important one for local technology vendors, but the nature of the activities carried out here dictates the type of IT that the companies are employing. According to Phil Vaughan, chairman of IT Healthcare Ireland, an industry group made of up IT managers in pharmaceutical and related industries the industry in Ireland is primarily focused on manufacturing with a small amount of research and development and limited sales and marketing operations to support activity in the local market.
While manufacturing is generally associated with low-skilled jobs that can be easily be transferred to low-cost locations that’s not the scenario here — 60pc to 70pc of those employed in the industry are university graduates. Pharmaceutical manufacturing is a highly sophisticated operation that is highly regulated. It uses advanced manufacturing techniques, state-of-the-art equipment and strict quality control.
Martin Kelly, a senior consultant with IBM Business Consulting Services, believes the pressure from low-cost locations will increase in the coming years. “When the parent companies are asking plant to manufacture new drugs they will be looking at how much it costs in each location. The challenge for local managers will be to remain competitive against lower-cost economies and some managers are more proactive in that respect that others. Locally there’s a lot of sunk costs as it’s not as easy to move as a call centre,” he adds.
According to Vaughan, the burning issue for IT managers is supporting compliance with regulation in particular the US Food and Drug Administrations 21 CFR Part 11. This covers how manufacturers can use electronic records and signatures to produce the supporting documentation necessary for the Food and Drug Administration (FDA) to allow a drug to go on sale in the US.
“It’s less of an issue now but it put a big burden on the sector and stemmed the growth in automation,” says Vaughan. “Electronic batch records are the big driver now — to be able to do that electronically. The paperless office would appear to be old hat but there’s still lots of paper in this industry. A new impetus is that the FDA is adopting a risk-based approach to compliance. That offers an opportunity to move forward and IT needs to support that.”
Vaughan feels that in the past many IT projects in the sector were justified purely on the basis of the compliance but as in other industries return on investment and business benefits are now the order of the day. “It was evident that when 21 CFR Part 11 was initially published that we needed to bring legacy systems up to date but it wasn’t necessarily adding value to the business. Now it’s difficult to justify IT projects on that basis,” he says.
Regulation of manufacturing processes also has a knock-on effect for IT. Once a process has been approved, even an upgrade of the software requires re-certification. As a result the sector is not an adoptor of leading-edge technologies and is firmly of the ‘if it isn’t broke don’t fix it’ mentality. “A lot are still using NT4.0 and Office 98, it’s not uncommon for them to be three to four years’ behind the current release, particularly in manufacturing rather than R&D.” says Qumas’ chief technical officer Ken Hayward. “R&D is happier to adopt new technology especially earlier in the process — as you get closer to phase three trials its more nailed down.”
Cork-based Qumas has built a business out of providing its compliance software, eDoc Compliance, to companies in the life sciences sector. The software enables documents to be handled electronically — that’s a huge headache as up to a million pages of documentation can be required to support the approval of a drug. According to Hayward it deals with the top 100 pharmaceutical companies in the world. He has also seen a shift from simple compliance to a desire to do it efficiently. “The risk management approach to compliance means companies are trying to optimise their compliance process, so that they can achieve cost savings and compliance simultaneously.”
Irish-headquartered contract research company has tackled the mountain of paper it has to generate on behalf of its clients by choosing a managed print service from Datapac. It hopes to achieve significant cost savings by consolidating on Hewlett-Packard (HP) multifunction hardware and only paying for what it prints. According to administration manager, Una O’Sullivan, the company has already made a significant saving by using the scanning to email and fax capability. “It has helped us to reduce courier costs significantly. We’re involved in global trials and we have to get paper from the clinical trial locations to our office and then on to other offices in the group. That’s an immediate saving we’ve made.”
While generic business applications such as SAP are popular in the secondary manufacturing and medical devices space, Vaughan says primary manufacturers need an extra layer to integrate the plant control systems with the enterprise resource planning (ERP) systems. Specialist enterprise production management systems such as those offered by Germany’s Propack Data fill this space.
“Manufacturing execution systems go hand in hand with electronic batch records and sit between the ERP and the control systems,” explains Vaughan. “You want to be able to get the data out of the control systems as fast as possible.”
Another overarching concern for pharmaceuticals is to continue the pipeline of new drugs that saw them enjoy double-digit growth in the Nineties. “They need to bring new products to market faster as they are facing a hole in their pipeline,” says Gerard Hutchings, a director of HP’s worldwide pharmaceutical and life science industries. “Most of the major large scale therapeutic problems have been cracked and a lot of products are coming off patent.” The challenge to IT is to provide the products that enable new drugs to come to market quicker.
One way it’s doing that is sharing the knowledge it has gained in manufacturing technology products — HP will this summer invite pharmaceutical industry executives to its print supplies manufacturing facility in Leixlip. Hutchings sees parallels in that both industries have a complex supply chain, rely on collaborative development and manufacturing, have a long product life cycle and produce high-value products that are subject to counterfeiting.
IBM Business Consulting Services does a large amount of work in the sector and recently published a report entitled ]italics[ Pharma 2010 ]italics[, which looks at where the industry is going in the next six years. According to Kelly seven key technology trends were identified. The biotech and R&D sectors will drive the adoption of new chip and storage designs particularly around the area of supercomputing and grid technologies. RFID, which allows each package in the supply chain to be tracked using radio frequency will also become popular. For manufacturing process analytical technology (PAT), will have a big impact as the FDA moves from auditing by looking at the output of manufacturing to auditing the processes themselves. IBM expects the other significant areas of growth to be storage, ERP, document management and e-learning.
Roland Noonan (pictured), managing director of Sun Microsystems’ distributor Horizon Open Systems, also believes that RFID will have a major impact. “The whole thing is about supply chain — you want to know where is a product and where has it come from,” says Noonan. “Pharmaceuticals have particular issues around ageing, traceability and batch control. The goal is to get the price down to 1 cent a chip — when you consider how much it costs to certify a new drug it makes the cost of the technology irrelevant.” Many in the industry are also hoping that introducing RFID to the supply chain may also help it tackle the growing problem of counterfeiting.
Traditionally, the IT and plant automation teams in the sector were separate entities, but Vaughan has noticed a clear trend to amalgamate both into one team. Automation was generally a hardware-intensive task with its own proprietary tools but now it is increasingly using Windows-based technology, which makes it a more natural fit with IT rather than engineering.
Industry body PharmaChemical Ireland has cautioned that the golden days for the sector in Ireland could be over thanks to spiralling operational costs, a lack of a hazardous waste infrastructure and a decline in new graduates. The Government seems to be mindful of the risk — at the moment Science Foundation Ireland and other agencies are working to foster a biotech cluster here with the hope that future pharma investment will be around high value R&D. If Ireland Inc. is successful in that bid it will have a knock on effect for IT suppliers. “If we can attract pharmaceutical R&D, their requirement for highly intensive technology would be huge,” says Noonan. “They are working with very complex chemical formulae and running simulations on them that can take up to a week. If you can give them a machine to do that in a day they will bite your arm off.”
By John Collins