Document Type

Working Paper

Date of this Version

4-20-2021

Abstract

Small molecule drug products play an enormous role in innovative treatments for a vast number of diseases and have comprised most annual FDA drug approvals each year to date. Thus, economically efficient mass production of small molecule drugs is an essential public health concern. While batch production of these types of pharmaceuticals dominates the industry, continuous manufacturing has emerged as a promising technology with positive economic implications. However, due to the newness of the technology, pharmaceutical companies have been reluctant to adopt continuous manufacturing. This project presents a full economic evaluation of batch versus continuous manufacturing of a high-volume small molecule drug product through ground-up design of production facilities and a target cost of conversion of one cent per tablet. The production of tablets from API (active pharmaceutical ingredient) is broken down into six different unit-operations—granulation, drying, milling, blending, compression, and coating. The batch and continuous processes are designed at the unit-operation level to determine equipment and utility costs, allowing for a rigorous profitability analysis. It was determined that the continuous manufacturing process is more profitable than the batch process. For a cost of conversion of one cent per tablet and a 21-year plant life, the batch process had an internal rate of return (IRR) of -0.3% and return on investment (ROI) of -2.4%, while the continuous process had an IRR of 8.4% and ROI of 2.7%. Further analysis showed that increasing the cost of conversion to two cents per tablet resulted in an IRR of 26% and ROI of 17% for the batch process and an IRR of 37% and an ROI of 28% for the continuous process. Increasing the cost of conversion confirms that the continuous process is more profitable than the batch process.

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Date Posted: 11 May 2021