Carfagno, Anthony M. (1988, ASQC) Ivers-Lee Division of Becton Dickinson & Co., West Caldwell, NJ
The decision to contract manufacture or package a pharmaceutical product is one that occurs frequently within the industry. As new products are developed and pass through the investigational state, management must address the ultimate decision to "make or buy". For products that are similar to those already being produced, the decision is usually to produce these products internally, provided that space and equipment is available. Products that differ from those already produced, however, are better procured, in most instances, from outside sources. The vast majority of newly developed products fall between these two parameters and the decision to "make or buy" is not easily made.
Contract manufacturing and packaging within the pharmaceutical industry dates back to the origins of the industry itself. Whenever, a pharmaceutical company wanted to add a new product to its line without incurring the costs of added equipment, they would usually ask another company with that equipment to produce or package the product for them. This decision is usually made without a complete analysis of the data-bank available. Many times the decision to contract package a high technology item is made primarily on cost factors, only to discover the end-item quality does not conform to in-house standards.
Through the use of a survey of major manufacturers and contractors this paper will provide a positive response to the challenge of Vendor Quality by demonstrating the advantages and disadvantages of contracting, the criteria to be utilized in evaluation of contractors, controls to be exercised and the factors necessary for the "make or buy" decision.
Food, Drug, and Cosmetics Division,Pharmaceutical industry