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Breaking the Rapid Microbiological Method Financial Barrier: A Case Study in RMM Return on Investment and Economic Justi

Breaking the Rapid Microbiological Method Financial Barrier: A Case Study in RMM Return on Investment and Economic Justification. Rapid Microbiological Methods.

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Breaking the Rapid Microbiological Method Financial Barrier: A Case Study in RMM Return on Investment and Economic Justi

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  1. Breaking the Rapid Microbiological Method Financial Barrier: A Case Study in RMM Return on Investment and Economic Justification

  2. Rapid Microbiological Methods • Recent advances in rapid microbiological methods (RMM) provide the analytical tools necessary to move conventional microbiology methods out of the laboratory and onto the manufacturing floor • Real-time or close to real-time systems provide Process Analytical Technology (PAT) and Quality by Design (QbD) opportunities for contamination control and continuous process and product improvement

  3. Qualification Guidance • PDA Technical Report #33, Evaluation, Validation and Implementation of New Microbiological Testing Methods • Currently under revision • USP <1223>, Validation of alternative microbiological methods • EP 5.1.6, Alternative methods for control of microbiological quality

  4. Regulatory Acceptance • Approvals in both the U.S. and in Europe • PAT initiative • FDA comparability protocols • Regulatory agency review and compliance staff microbiologists have published and presented on the acceptance of RMMs • David Hussong, Brenda Uratani, Rick Freidman, FDA • Paul Hargreaves and Gustavo Marco, MHRA • Riccardo Luigetti, EMEA • Hans van Doorne, EDQM

  5. But a Perception $till Remains • Many senior leaders in our industry dismiss the potential long-term benefits and only “see” the upfront expenses • Capital cost, validation and calibration fees, maintenance contracts and headcount dollars required to conduct the validation studies and installation activities • To remove the financial fears associated with implementing RMMs, it is necessary to develop a comprehensive economic analysis that will demonstrate that the long-term benefits of qualifying and implementing RMMs far outweigh the short-term expenses

  6. A Strategy for Assessing RMMs • Review current conventional microbiology methods and recognize potential technology, quality and business opportunities for implementing a RMM • Identify available RMM platforms that will meet future technical and business needs • Develop a business case for implementing a RMM including a cost comparison of the RMM and the conventional method that will be replaced

  7. Review Conventional Methods • Manual process • Resource intensive • Long incubation times for growth-based methods • Limited or no growth of stressed, injured or viable but non-culturable (VBNC) organisms • Opportunity to respond to an excursion or out of specification (OOS) result is much later than when the event actually occurred

  8. RMM Technical Benefits • Significantly reduced time-to-result or results in real-time • More sensitive, accurate, precise, and reproducible when compared with conventional, growth-based methods • Single cell detection • Enhanced detection of stressed and VBNC organisms • Increased sample throughput and automation • Continuous sampling and data collection • Enhanced data handling and trend analysis

  9. RMM Business Benefits • Reduced microbiology testing time and testing costs • Reduction or elimination of off-line assays • Reduction in laboratory overhead, resources and equipment • Decreased re-sampling, retests and OOS investigations • Decrease in response time and corrective action for contamination events • Reduction in raw material, in-process material and finished goods inventory holdings

  10. RMM Business Benefits • Reduction in rework, reprocessing and lot rejections • Decreased variability and deviations • Reduction in manufacturing cycle time • Elimination of production line and plant downtime • Reduction in warehouse space • Back order avoidance • Increased yields • Lower cost of product sold

  11. RMM Business Benefits • Enhanced understanding, monitoring and control of manufacturing processes • Increase in manufacturing efficiencies, capabilities and flexibility • Shifting from a reactive to a proactive microbial control strategy, thereby enabling Quality by Design (QbD) and PAT principles

  12. Develop a Business Case • Establish an effective team • Finance • Procurement • Quality Assurance/Quality Control • Regulatory Affairs • Manufacturing • Technical Services • Equipment Validation • Computer Systems Validation • Statistics

  13. Develop a Business Case • Compare the overall costs associated with performing the conventional method and the proposed RMM • Direct and indirect costs for the conventional method • Direct and indirect costs for the RMM • Savings and/or cost avoidances associated with the RMM

  14. Costs Associated with Conventional Method • Cost per test (media, consumables, regents and supplies) • Total sampling, transfer to lab, preparation, testing, data handling and documentation resource time per test (hours) • Cost of labor including salary and benefits (local currency per hour) • Cost to dispose of used media, reagents and consumables per test • Laboratory equipment depreciation, calibration and qualification • Overhead for laboratory and storage space • Data management and record retention • Preventive maintenance and service contracts for laboratory equipment

  15. Costs Associated with RMM • Same as for conventional method plus: • Capital costs for initial investment • Training • System qualification and method validation costs • Regulatory filing costs, if applicable • Changes to in-process microbiological methods or methods that are not specified in an NDA or marketing authorization may not require a formal regulatory submission to implement the change

  16. Savings Associated with RMM • Reduced testing and finished product release cycle times • Reduction or elimination of laboratory equipment and overhead • Reduced headcount • Reduced repeat testing and investigations, lot rejection, reprocessing and rework • Reduction in plant downtime • Increased yields and lower cost of product sold • Reduced raw material, in-process and finished goods inventory holdings

  17. Financial Models • When all of the elements associated with the costs and savings for both the conventional method and the RMM have been collated, this information can then be used to calculate whether there is a financial advantage for implementing the RMM • Return on Investment (ROI) • Payback Period (PP)

  18. Return on Investment (ROI) • ROI is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested • Compare the cost of performing the conventional method with the cost (and savings) of using the new RMM • The information is reported as a percentage (%) and usually represents an annual or annualized rate of return

  19. Return on Investment (ROI) ROI = Annual Net Benefits / RMM Investment CM = conventional method RMM = rapid microbiological method

  20. Return on Investment (ROI) • The ROI can be calculated for the first year (where the initial capital investment will be made) and then every year thereafter once the RMM is routinely used • The rate of return can take on any value greater than or equal to -100% • A positive value corresponds to an investment gain, a negative value corresponds to a loss, and a value of 0% corresponds to no change • The higher the ROI number is, the greater the return the firm will realize on the initial investment for the RMM

  21. Payback Period (PP) • The PP is the time required for the return on an investment to "repay" the sum of the original investment • In the context of implementing a RMM, this would be the time (usually in years) required to realize enough cost savings/avoidances to pay for the initial investment of the RMM capital equipment, qualification and implementation activities

  22. Payback Period (PP) PP = RMM Investment / Annual Net Benefits

  23. RMM ROI & PP Case Studies • A company operates three parenteral manufacturing facilities employing isolators and conventional cleanrooms • They are exploring ways in which they can implement a RMM that will provide real-time, in-process monitoring capabilities while realizing significant cost savings • After a review of their current in-process microbiology testing requirements, the company identified active air sampling as their most expensive and time consuming activity

  24. The Three Facilities • A small fill-finish facility that processes 40,000 active air samples per year. Manufacturing is performed in conventional cleanrooms. This site rejects one $300K USD product lot per year due to EM excursions on conventional media and shuts down the line to conduct an EM investigation. • A medium fill-finish facility that processes 70,000 active air samples per year. Manufacturing is performed in isolators. The site rejects one $1M USD product lot per year due to EM excursions on conventional media and shuts down the line to conduct an EM investigation. • A large fill-finish facility that processes 100,000 active air samples per year. Manufacturing is performed in conventional cleanrooms and the process is personnel intensive, resulting in the rejection of three $500K USD product lots per year due to EM excursions on conventional media. This site also shuts down a line three times per year to conduct the EM investigations.

  25. Selecting the RMM • The company selects the BioVigilant® IMD-A™ as a potential replacement for their existing agar-based active air sampling method • The company expects to realize significant cost savings because the system eliminates manual sampling and laboratory testing, has no consumables, reagents, media or supplies, and can run continuously during the entire manufacturing campaign • The company is also interested in the potential technical benefits of the system, as results are obtained in real-time for both viable and nonviable particles

  26. Case Study #1 Operating Costs • Because the IMD-A operates continuously, in this example we will assume that the actual number of tests performed can be reduced by a factor of 5 as compared with the CM. • Depreciation for IMD-A equals 10% of capital cost (assumes 15 units at $90,000 USD each; pricing used is representative and is for calculation purposes only, as the supplier may vary the price based on configuration and quantities purchased). • Annual maintenance and service contracts start in year 2 and are based on geographic region and services contracted. Pricing assumed equals 12% of capital cost (15 units at $90,000 USD each).

  27. Case Study #1 IMD-A Savings

  28. Case Study #1 IMD-A Investment (1) 15 instruments at $90,000 USD each.

  29. Case Study #1 ROI Calculations • The resulting ROI for the first year is equal to 1.846 or 184.6%, resulting in a first year savings equal to $1,235,000 USD • The resulting ROI for the second and subsequent years is equal to 506.6 or 50,660%, resulting in second year and subsequent annual savings equal to $2,528,000 USD

  30. Case Study #1ROI Calculations • The resulting ROIfor a total of five yearsis equal to 8.786 or 878.6%, resulting in a five year savings equal to $11,347,000 USD

  31. Case Study #1 Payback Period Calculation • The resulting PPis equal to 0.54 years, or 6.5 months

  32. Case Study #2 Operating Costs • Because the IMD-A operates continuously, in this example we will assume that the actual number of tests performed can be reduced by a factor of 5 as compared with the CM. • Depreciation for IMD-A equals 10% of capital cost (assumes 20 units at $90,000 USD each; pricing used is representative and is for calculation purposes only, as the supplier may vary the price based on configuration and quantities purchased). • Annual maintenance and service contracts start in year 2 and are based on geographic region and services contracted. Pricing assumed equals 12% of capital cost (20 units at $90,000 USD each).

  33. Case Study #2 IMD-A Savings

  34. Case Study #2IMD-A Investment (1) 20 instruments at $90,000 USD each.

  35. Case Study #2ROI Calculations • The resulting ROI for the first year is equal to 3.647 or 364.7%, resulting in a first year savings equal to $5,055,000 USD • The resulting ROI for the second and subsequent years is equal to 1349.8 or 134,980%, resulting in second year and subsequent annual savings equal to $6,744,000 USD

  36. Case Study #2ROI Calculations • The resulting ROIfor a total of five yearsis equal to 17.781 or 1778.1%, resulting in a five year savings equal to $32,031,000USD

  37. Case Study #2Payback Period Calculation • The resulting PPis equal to 0.27 years, or 3.3 months

  38. Case Study #3 Operating Costs • Because the IMD-A operates continuously, in this example we will assume that the actual number of tests performed can be reduced by a factor of 5 as compared with the CM. • Depreciation for IMD-A equals 10% of capital cost (assumes 48 units at $90,000 USD each; pricing used is representative and is for calculation purposes only, as the supplier may vary the price based on configuration and quantities purchased). • Annual maintenance and service contracts start in year 2 and are based on geographic region and services contracted. Pricing assumed equals 12% of capital cost (48 units at $90,000 USD each).

  39. Case Study #3 IMD-A Savings

  40. Case Study #3IMD-A Investment (1) 48 instruments at $90,000 USD each.

  41. Case Study #3ROI Calculations • The resulting ROI for the first year is equal to 1.828 or 182.8%, resulting in a first year savings equal to $3,668,000 USD • The resulting ROI for the second and subsequent years is equal to 1,515.92 or 151,592%, resulting in second year and subsequent annual savings equal to $7,574,600 USD

  42. Case Study #3ROI Calculations • The resulting ROIfor a total of five yearsis equal to 8.672 or 867.2%, resulting in a five year savings equal to $33,966,400 USD

  43. Case Study #3Payback Period Calculation • The resulting PPis equal to 0.55 years, or 6.6 months

  44. Summary of Cost Analyses

  45. Summary of Cost Analyses • Each case study provided the company with a financial justification for implementing the BioVigilant IMD-A as an alternative method to conventional active air sampling • The PP was relatively fast due to the significant cost savings realized during the first year of implementation • The use of this RMM in these facilities would directly impact the company’s bottom line. This will satisfy the expectations of site management and their corporate manufacturing, finance and strategic leadership teams.

  46. Conclusion • This presentation provided one example of how a firm can use cost analysis models to support the business justification for implementing a RMM • You can apply these models to any RMM • Personalized ROI and PP analyses should be conducted for every RMM proposal to fully understand the savings potential • This information should be used to complement the technical and quality justifications for qualifying and implementing a RMM for routine use

  47. Overview of RMM Technologies • Growth-based • Vitek, Omnilog, Phoenix, Bactometer, Bac T Alert, BacTec, Growth Direct • Viability-based • Scan RDI, MicroPro • Cellular component or artifact-based • PyroSense, EndoSafe PTS, MIDI, MALDI BioTyper, MicrobeLynx, SELDI-TOF MS • Spectroscopic-based • IMD-A, REBS, BioSentry • Nucleic acid-based • Riboprinter, MicroSeq ID and Mycoplasma, Diversilab, MassARRAY, GeneSystems, TIGER T-5000, MycoTool, MicroCompass, NASBA, TMA,

  48. RMM ROI References • European Pharmaceutical Review, April 2009 • PDA Letter, May 2009 • Pharmaceutical Manufacturing, June 2009 • BioPharm International, September 2009

  49. Michael J. Miller, Ph.D. • Microbiology Consultants, LLC • web: http://microbiologyconsultants.com • email: mjm@microbiologyconsultants.com • LinkedIn: http://www.linkedin.com/in/drmichaelmiller • phone: 727-437-2743 (RAPID-RAPID)

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