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Manufacturing Formula and Process Review:

In the pharmaceutical product development life cycle, there are many occasions when one is forced to relook at the formula and process, but most commonly it is due to a squeeze on margins that awakens the management.

This is an exercise an organization should undertake periodically to help enhance Gross Margins and increase the bottom line. It is advisable to allocate this work to an external agency, like an audit, which will facilitate independent and impartial study. Substantial improvement in gross margins is possible.

Some areas to look at are


Product Development is undertaken as per the strategic plan. But invariably the strategic plan is modified very often. Some products are cancelled and some are newly added. Ongoing development work of some products has to be abandoned due to cancellation. Work on newly added products has to be taken up on priority, to meet with the launch date. And usually the launch date is planned by Sales and Marketing based on many factors, like market conditions, competition, climatic season best suited for the launch, top line, bottom line etc.

In such a situation, R & D team does not get adequate time to carry out development work with thorough experimentation due to crunched timelines. They are under pressure to complete the work on time. In the bargain some steps are skipped. e.g. Input materials are chosen from those available in-house at that moment. There is no scope to order the right materials and wait for delivery. Products are designed based on thumb rule and not by carrying out series of trials. Sometimes best possible materials (though very expensive) are used in order to avoid risk of failure, because of paucity of time to try out other options. For the same reason overages are added as a safety precaution without proper study and without ascertaining that they are really required. In the process, though the product is somehow developed on time, it is always a compromised product. Gross margins are not very satisfactory but still the product is launched because of compulsion at various levels.

As time passes, all costs go up. e.g. Cost of Goods (COGS), transportation cost, promotional cost, overheads, finance cost etc. Finance department alerts the management on this, and then there is tremendous pressure on R & D to review the COGS.

There is a possibility to reduce COGS with systematic study of the formulation, trying out various alternatives, and optimizing the formula which is cost effective but at the same time with no compromise on quality. With the advance in science and technology there is always a possibility to try out options like using a different excipient or a vehicle or replacing a packaging material etc. that can result in cost reduction..

Manufacturing Process:

R & D scientists usually have very high educational background like a doctorate. But they lack experience in production and hence the production perspective. As the product they are developing is their baby, they want to nurture it very carefully and with a soft touch. Thus, they tend to develop a very delicate and complicated process, which they feel is necessary to protect the product. Many times, in reality it is not necessary.

Contrary to this, on the production floor a different kind of set up prevails. Education level of production personnel is different, usually science/pharmacy graduates. Their mind set and attitude is different. They are under pressure of delivering production on time, achieving yields, maintaining batch cycle, labour relationship, productivity, and charging the next batch as per the tight production schedule. They do not like a very complicated process of manufacturing, and tend to take short cuts to simplify the same. Development scientists should understand this ground reality while developing the product. e.g. In a liquid oral product an R & D scientist would advise ten different ingredients of the formula to be separately dissolved in water and added to the batch. This is because he has done so in his bench scale experiments. But this adds so many steps to the process. Actually, it may be possible to dissolve some, or all of the ingredients in the same water, one after another, in one step before adding to the batch, thus reducing number of steps. Production team should be given as simple and robust a process as possible. This can also reduce possibility of process errors. While developing the process, the development scientists should not hesitate to take inputs from production supervisors and even workers. They are working on the shop floor, day in and day out, and can give very valuable suggestions.

Therefore, it is necessary to review manufacturing processes of products periodically to examine if there is a scope for revision/simplification.

Following are only a few simple examples:

  1. A company was manufacturing and marketing tablets of Minerals and Vitamins. On review of the formula it was seen that 50% overages of Vitamin D3 were being added. Coated vitamin D3 of a reputed MNC was being used. Stability data on the product was asked for. Also, control samples of the product at 6 months intervals, including one, 6 months beyond shelf life, were subjected to detailed analysis. From the results it was seen that vitamin D3 was in the range of 120 – 130% of the label claim at the end of shelf life.

    Based on this, 30% overages were recommended resulting in COGS improvement. It was implemented on conducting stability studies with reduced overages.

  2. A liquid oral product used sugar syrup, along with glycerin, sorbitol and propylene glycol as a vehicle. Glycerin was in good quantity. On critical review of the formula it was felt that glycerin was really not necessary and the same could be replaced with sorbitol. The R & D team did not want to disturb the formula as it was established over the years and they were reluctant to make any changes therein.

    Some experiments were carried out and accelerated studies showed that the product without glycerin was quite satisfactory. Glycerin being very expensive compared to sorbitol, the revised formula resulted in cost reduction. The product is still running very well in the market.

  3. A nutritional supplement contained whole milk powder, skimmed milk powder, vegetable oils, sugar, vitamins and minerals. The company was buying whole milk powder during flush period and keeping the stock for the entire year’s requirement.

    Dairies normally manufacture whole milk powder only during flush period when milk availability is plenty. During lean period they do not manufacture the same. If required they can manufacture it, but at a very high cost.

    Given this, it was suggested to use dairy whitener in place of whole milk powder. The formula could be balanced by adjusting the quantities of dairy whitener, vegetable oils and skimmed milk powder. Dairy whitener is manufactured and available throughout the year and hence the company does not have to maintain the inventory for the entire year. It is also comparatively less expensive. Thus there was direct cost reduction because of use of dairy whitener and also there was no cost burden of inventory of whole milk powder.

  4. A renowned Pharmaceutical company had a powder product with a popular brand name in the market. It was a blend of various ingredients in powder form. On review of the process it was observed that the mixing time for the final blend was 2 hours. No data on how this mixing time was arrived at was available with R & D Department. Normally there is a tendency not to make any change in a well established product formula or process. A systematic process validation was carried out by periodically drawing samples and subjecting to analysis. This led to the fact that the ideal mixing time was only 45 minutes. This saved the cost of running the machine, batch cycle time etc.

    J A Sakhavalkar (Nov. 2012)
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Manufacturing formula and process review, Cost of Goods (COGS), Optimizing formula, Revision, simplification