For the past 10 years, the production of pharmaceutical ingredients has been outsourced from the US to Asia. However GMP Consulting firms have seen a shift back to US based production companies. In this article some of the reasons for the Asian outsourcing failure will be discussed.

When pharmaceutical companies decided to move the production if Active Pharmaceutical Ingredients (APIs) to Asia, they thought they would be getting a good deal on price. This was to take advantage of the cheaper labour and rental costs that they could not get in the US. Pharmaceutical companies thought that these low costs would be enough but there are hidden costs which are making outsourcing more expensive than expected.

Problems With Quality
The US has been scrutinising the quality of Asian-produced drugs since the contaminated Heparin affair last year which saw death and serious illness across the nation. Because of this, US citizens, healthcare professionals and pharmaceutical companies are demanding higher quality ingredients that are made in the US. US manufacturers are forced to produce ingredients of the highest quality because they are subject to thorough GMP regulations.

Logistics
The cost and complexity of logistics when it comes to outsourcing your ingredient production oversees is massive. The costs of this are now hitting home. There are costs for employing solicitors, for hiring offices and for travel. You are looking at very expensive additions when you factor these in to the standards costs of outsourcing.

Communication
When you outsource products overseas, communication is often the most complicated factor. And when you can barely get through a daily conversation without becoming confused, how are you supposed to clearly convey technical information. Communication will also be slowed down when you have to compete with different time zones. Consumers and regulators demand instant information and when you have to wait for your partners to start their working day before you can get in touch with them, you put yourself in a difficult position.

Now that the production of APIs has been outsourced to Asia for a number of years, the massive financial windfalls that companies expected have not proved to be realistic. In fact, by moving your production back to the US you are filling your customers with confidence of quality and can make bigger profits.

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