AstraZeneca has begun to outsource production of some of its bestselling medicines to low-cost manufacturers in China, Times Online reported.
As part of a restructuring drive designed to cut $900 million (£440 million) of the drugs group’s costs by 2010, the drugs giant is to begin purchasing Lactam, a key chemical ingredient used to make Seroquel, its blockbuster schizophrenia drug, from contract manufacturers in China.
A company spokeswoman was quoted as saying that the company was only in the “start-up phase” of sourcing Lactam from China. “There are still many steps involved, including internal assurance that standards are met, followed by submissions to appropriate regulatory agencies for approval,” she said.
To assist with the move towards more outsourced production, AstraZeneca has opened a new Chinese sourcing centre near Shanghai to help it to identify low-cost producers and to manage the transition from in-house to outsourced production, according to Times.
At present AstraZeneca purchases most of the basic raw materials and chemicals for drugs and then uses its own factories to conduct more advanced stages of active pharmaceutical ingredient (API) production, as well as the formulation of medicines, preparation of pills, capsules and injectables and then final packaging and distribution.
However, it is planning to gradually cease in-house production of API, the building blocks of conventional medicines. Ultimately it is looking to outsource other, more advanced manufacturing and logistics activities, said the report.
The transformation will take several years because of complex regulatory issues and the need to ensure quality control and complete reliability of supply, according to Times.