For the past 10 years, the production of pharmaceutical ingredients has been outsourced from the US to Asia. But now GMP Consulting firms are seeing companies move this production back onto US soil. In this article some of the reasons for the Asian outsourcing failure will be discussed.

Pharmaceutical companies believed they were getting a good deal as they outsourced the production of Active Pharmaceutical ingredients or APIs to Asia. Production costs like labour and premises rent is better value than in the US. However, now manufacturers are beginning to realise that there are many costs and logistical issues which make this outsourcing more expensive than first thought.

Quality Problems
Ever since a contaminated batch of Heparin entered the US market and was responsible for the deaths and illness of hundreds of people across the nation, the quality of Asian imports has been in doubt. Because of this, US citizens, healthcare professionals and pharmaceutical companies are demanding higher quality ingredients that are made in the US. Quality is stringently measured by the FDA so GMP regulations have to be met by US based manufacturers.

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. These expenses on top of the other complications that are involved in oversees outsourcing can add up.

Communication Issues
When you outsource products overseas, communication is often the most complicated factor. It is hard to convey technical messages in foreign languages never mind everyday conversations. Manufacturers also need to factor in the time it takes for communication to occur between two different countries which are in a different time zone. 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.

The massive Asian outsource that pharmaceutical companies have undertaken over the past decade has not proved as financially profitable as first thought. It seems that by producing quality products in the US can be more profitable as your customers will trust the quality of your products more.