In efforts to improve efficiency, we often turn to the basics: cut the time it takes to accomplish the task, cut the cost incurred to complete the project and cut the amount of waste associated with the process. Unfortunately, as any project manager can attest to, increasing efficiency is easier said than done. When you have cut your time, costs and waste as much as possible, what is left to cut?
One simple often overlooked approach in improving efficiency is to MANAGE cost more effectively.
From the beginning of the development process, costs incurred can accumulate exponentially. Achieving maximum efficiency requires focus, implemented by great people and directed by management. A primary focus is identifying key cost drivers and determining how to effectively manage those costs.
When trying to determine the cost drivers we need to take in consideration more than just the cheapest possible outcome; quality must be considered as well. Factors such as the location of product manufacturing facilities and the layout of the project can and should be assessed for maximum efficiency and minimal cost.
What could this streamlined and more efficient process look like for your company?
Consider a process beginning with specific data entry for materials and prices, facility costs, process information, batch data and synthetic routes, followed by creating worksheet calculations and scenario building. Individual users could utilize company-specific data to derive cost ladders and sensitivity analyses that clarify how changes impact the cost and determine the key cost drivers of your specific manufacturing process.
Consider the time around calculating the cost to streamline and lower budgets:
Included in that figure is what economists call “time costs,” which DiMasi defines as “expected returns that investors forego while a drug is in development.” He estimates those time costs to be $1.2 billion. If we remove that figure, the actual out-of-pocket spending to create a new drug is $1.4 billion. And if we combine that pre-approval out-of-pocket cost with the post-approval cost estimate of $312 million, you get $1.7 billion spent to develop a new drug.
Cutting time in the process of calculating the cost of pharmaceutical d
evelopment is critical in controlling time cost.
A relentless drive towards greater efficiency while controlling all aspects of your budget accurately should not be considered a luxury, but rather a necessity.