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GlaxoSmithKline investing $18 million in two-year operation to restructure Cidra plant

Plant realignment centers on the manufacturing of seven blockbuster products

BY MARIALBA MARTINEZ of Caribbean Business

June 10, 2005
Copyright © 2005 CARIBBEAN BUSINESS. All Rights Reserved.

GlaxoSmithKline’s (GSK) pharmaceutical manufacturing plant in Cidra will implement a new strategy over the next two years by investing more than $18 million in its infrastructure and human resource components, said Graham Johnson, GSK vice president & site director.

"Puerto Rico’s GSK plant is one of eight new product and global-supply factories that produce approximately 80% of the company’s revenue," said Johnson to CARIBBEAN BUSINESS during a site visit of the plant. "We now have a clear strategy to move forward, producing solid-dose tablets and capsules for the U.S. market. There may be times when global supplies [demand we produce for foreign markets]. However, we must keep the complexity to a level we can [manage] so we can become masters of our craft in terms of quality and compliance. With the size of our operation, we can’t do this if you have 10 or 15 products. So, to succeed, we are going to [produce GSK’s] seven big blockbusters in Cidra, predominately supplying the U.S. market."

Johnson’s plan is to streamline the operation and make it more efficient, which includes a massive capital program in two major areas.

"One area is infrastructure and equipment, with major equipment investment in coating pans, compression machines, packaging lines, reorganization of the building structure in the main manufacturing areas, and office renovations," Johnson said. "As for additional employees, we will be recruiting locally and from our network, looking for quality analysts, regulatory experts, and other technical personnel. The bar has been raised, and we recognize it."

GSK Packaging Manager Sergio Rodríguez is closely supervising the changes being implemented to the area, where all final products are packed and distributed to their final destination.

"We currently distribute most products to U.S. domestic markets, except for Paxil and Avandamet, which still are marketed globally," Rodríguez said. "Currently, the area is being restructured to add new packaging lines. We have four of these lines for bottles sent to the domestic market and two blister-package lines for international markets. At the end of 2005, we expect to have added two additional blister lines for international markets and one to package sample pills for the domestic market. In addition, construction already has begun to add three state-of-the-art bottle packaging plants to our area."

GSK is set up as a five-day, three-shift operation and basically is running at full capacity. This is why it is important to encourage employee development, Johnson said.

"We are developing the people, starting with my learning to speak Spanish so we can all communicate better," said Johnson. "I would like to emphasize operational excellence, which is a continuous improvement initiative I have seen work extremely well in other GSK facilities. This process involves using such methodologies as lean sigma, lean thinking, and six sigma to make manufacturing more statistically stable. We also want to empower people by holding ‘kaizen blitzes’ where people from the shop floor bring ideas [to management] that they aren’t necessarily asked for or don’t feel they should offer. Once you get into the habit of fixing something that needs fixing, this is very powerful."

GSK blockbuster products produced in Cidra

GSK’s manufacturing plant in Cidra is on approximately 94 cuerdas (one cuerda equals 0.97 acre). At one time, it produced 18 pharmaceutical drugs in 62 doses, using six different technologies that were distributed in 23 markets worldwide. The seven blockbuster products now manufactured in Cidra include Avandia and Avandamet, used to treat Type 2 diabetes; Bactroban, for infected traumatic skin lesions; Coreg, which helps lower high blood pressure and combats hypertension to prevent or recover from heart attacks; Ecotrin, aspirin used in the prevention of heart disease and heart attacks; Paxil IR and CR, which are treatments for depression and anxiety disorders; Relafen, a nonsteroidal anti-inflammatory product; and Tagamet and Tagamet HB, which prevent heartburn.

Three products–Avandia/Avandamet, Paxil IR/Paxil CR, and Coreg–brought in a little more than $2 million of the company’s $9.2 billion global sales for the first quarter of 2005. These results were despite an early-March intervention by the Food & Drug Administration (FDA) that halted distribution of Paxil CR and Avandamet because of manufacturing concerns in Cidra. By the end of April, GSK already had signed a consent decree with the FDA for an independent expert to review the company’s manufacturing processes for compliance with FDA good manufacturing practice requirements. Any deficiencies identified would be corrected by setting out a corrective plan and timetable, which GSK already is implementing. Even more surprising, no financial penalties were imposed under the consent degree, which analysts had mistakenly anticipated could reach $1 billion.

Johnson, who arrived in December 2004, said: "The FDA had some issues about a couple of products that weren’t produced as compliantly as they would have liked. One of the products was Paxil CR, which is two pieces joined together in a formulation that under most circumstances stays together. We found that if anything was wrong with the [production] process, the pieces would break apart, something that shouldn’t happen. The FDA reasonably wants us to control the process so [the pills] won’t split in the first place. We now believe we brought that [concern] under control and are hopeful the product will be back on the market by this summer," Johnson said.

Some analysts surmise that lost sales from these products (Avandamet also was temporarily discontinued) could affect the company by as much as $250 million in 2005. However, GSK expects to make up for these lost sales when the products are back on the market this summer.

This Caribbean Business article appears courtesy of Casiano Communications.
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