AstraZeneca denies outsourcing plans
pharmafile | September 25, 2007 | News story | Manufacturing and Production |
AstraZeneca has denied it plans to outsource its drug manufacturing requirements by 2017, following comments made by a senior board member.
Executive vice president David Smith told UK newspaper The Times that the pharma company wanted to become "a pure research, development and marketing organisation".
"Manufacturing for AstraZeneca is not a core activity," Smith was quoted as saying. "AstraZeneca is about innovation and brand-building . . . There are lots of people and organisations that can manufacture better than we can."
But shortly after the interview was published, AstraZeneca issued a swift denial that it had such radical plans and said Smith had been selectively quoted in an interview set up to talk about how pharma is looking to other industries for supply chain ideas.
"The delivery of high-quality medicines for patients remains the top priority for AstraZeneca and our global operations will continue to source activities in-house that are critical to keeping connected with the patient and essential to ensuring patient safety," it said in a statement.
But the company added that it would begin look to India and China for more cost-effective external manufacture of active pharmaceutical ingredients used to make medicines.
AstraZeneca would not be alone in its move to outsource in this way. Production is cheaper in Asia, and many Western pharma companies are finding their profits threatened by generic producers, as the patents expire from their own existing drugs.
In 2006, AZ made global sales of nearly $27 billion, ranking it the world's sixth biggest selling pharma corporation. Since February, the company has axed 7,600 jobs in a restructure aimed to boost profits. It is forecast to lose 38% of its revenue over the next five years because of the expiry of patents on key drugs.
