A better pill

Managing director Sara Vincent and operations director Keith Daniels showed Ruari McCallion around Actavis’ Barnstaple factory and discussed the reasons behind the site’s growing output and the impact of a large investment programme.

The visit to the Actavis plant in Barnstaple, North Devon, was something of an eye-opener for a number of reasons – one of them close to home. As a sufferer of a condition called hypothyroidism (a non-functioning thyroid gland), I rely on a daily supply of levothyroxine. The Actavis plant is one of the UK’s largest manufacturers of that particular synthetic hormone treatment.

“A further important generic drug for Actavis is thyroxine,” says Sara Vincent, the facility’s managing director. “It represents approaching seven hundred million of the five billion or so tablets we make every year.” Hypothyroidism is a fairly common condition across the world. The Barnstaple plant was able to step into the breach when a partner company in Japan was damaged by the earthquake earlier this year. It is supplying them until the partner returns to full output.

North Devon is in an area of the UK more noted for its tourism than manufacturing but after travelling along the road that borders the beautiful wilderness of Exmoor, Barnstaple strikes a strong, bustling contrast to its rural hinterland. Nonetheless, it is a surprising place to find an advanced manufacturing facility.

Being a part of Actavis has increased the product pipeline for the Barnstable site
Being a part of Actavis has increased the product pipeline for the Barnstable site

The company’s origins are in Brighton, where it was established as Cox & Co in 1839. Its success can partly be attributed to the fact that Arthur Cox invented the sugarcoated pill. The company became Cox Pharmaceuticals and outgrew its cramped, four-storey building in the centre of Brighton and moved to Barnstaple in 1979, an area beloved of its owner, who had spent family holidays in the area. It was acquired by Hoeschst in 1984, was then taken over by Alpharma in 1998 and acquired by Icelandic company Actavis in December 2005. Its parent is active in 40 countries and employs about 10,000 people worldwide.

Growth, investment and focused business improvement have followed the acquisition and the company now has around 650 people employed on the Barnstaple site, with 400 of them in operations.

“We make generic medicines,” Ms Vincent says, which are therapies that have come out of patent. “We have a broad portfolio, totalling about 550 products and about 70 per cent of the volume we sell in the UK is made here. Eighty-five per cent of our production is for the domestic market. Our exports are either to support Actavis affiliates in other countries or to long-established connections, such as the Middle East and some European countries.” As well as thyroxine, it makes digoxin (which treats certain heart conditions); prednisolone (for inflammatory conditions and, at higher doses, against certain cancers); and analgesics (painkillers) such as co-codamol and tramadol. As its main products are generic medicines, it would be easy to assume that its range is pretty static – but assumptions often turn out to be wrong.

“Being part of Actavis has given us great access to a really strong pipeline of new products,” Ms Vincent says. “Seven years ago, we were launching maybe nine or 10 products a year; now, we are launching 50-60 a year. They [Actavis] have things that we did not and a strong pipeline is very important.” To illustrate the point, consider aspirin; it is long out of patent and in the generic area. A company like Actavis needs the ‘next generation’ of aspirin, the next level of anti-inflammatory painkiller.

“We either have to grow our product range or grow our market share – in fact, we need some of both,” Vincent explains. As the pharmaceutical industry develops, Actavis’s commercial and scientific challenges will continue and change. “The pipeline of the future will become more complex; many of the future patent expirations are in specialist areas and increased specialisation means less mass production.” It is expected that there will be a blurring of the lines between generics companies and patent holders, as more complex products emerge. Actavis will have to become more specialised but without abandoning the breadth of its range.

Actavis has a growing over-the-counter (OTC) and ‘branded’ portfolio, which has grown over the years both organically and by acquisition from, for example, Roche.

Barnstaple focuses on ‘dry’ products – tablets, rather than liquids. Its main customer is the NHS. It operates in a market that is both extremely competitive and highly regulated. It operates under Good Manufacturing Practice (GMP), the established procedure for pharmaceutical manufacturing recognised by many EU countries as well as Switzerland, Australia and New Zealand. Actavis competes with suppliers in traditionally low cost regions such as the South East Asia and South Asia.

ActavisFull lean portfolio
Part of Barnstaple’s strategy has been to invest in automation and business improvement. “We have been running a lean manufacturing programme for at least 15-years,” says operations director Keith Daniels, on the tour of the production area. “We began with TQM [Total Quality Management] and then moved into lean, then we adopted lean six sigma. We subsequently dropped the six sigma element.” Why would an organisation drop six sigma? “It was a bit too complex in terms of what we are seeking to achieve. We still have black belts and green belts on site and we adapt the methodology to our needs.

We still use processes such as DMAIC (define, measure, analyse, improve, control) to achieve quick results in Root Cause Analysis (RCA).” Actavis also incorporates kanban and SMED (singleminute exchange of dies) methodology into its processes.

“We do a huge amount of changeovers, from one product to another,” says Mr Daniels. “We have to be very flexible and agile.” With a range that covers over 300 products and five billion tablets a year, it is easy see his point. He indicates where a new mixing area had been added, which dispenses around 72 .5 tonnes of dry products a year. The room is fully enclosed and built to ATEX, or explosive atmosphere, standards. “We are mixing powders, industrial methylated spirits and other ingredients. We have to take precautions against explosions.” Personnel in these potentially dangerous areas wear complete protective suits, with breathing apparatus to protect them from inhaling medicinal molecules – but these are also to protect the product. Air handling units also help to keep the atmosphere clean and at the right humidity.

“All our staff are completely protected by downflow booths,” Mr Daniels adds. “Any excess material is pulled out of the atmosphere into the Heppa filtration systems. The air-fed hoods are additional protection.” There is evidence of Actavis’ multimillion pound investment programme at nearly every turn. Sealed piping conveys material into large mixing hoppers, which are removed and cleaned at every product changeover. A soon-to-arrive new washing machine will reduce water consumption in cleaning and sanitation.

The hoppers are square section – why not circular? “We use them on the basis that products have been designed to be blended correctly in them,” Daniels explains. “If we want to change anything, any attribute of the product at all, we have to go through a lengthy – and quite cumbersome but necessary – authorisation procedure. All medicines are highly regulated, and those regulations cover batch sizes, the size of the tablets, and where we get raw materials from. Everything is subject to regulatory approval.” So even the slightest change is not undertaken lightly; a business case will include the cost of re-certification.

Nitrazepam Tablets
Nitrazepam Tablets

Deviation is not tolerated
Blended material is moved by vacuum pipe to Courtoy compression machines and a sample is taken from each batch of tablets. They are tested for hardness, dissolution, friability and thickness, to ensure they all conform to the standard – the approved recipe. If there is any deviation then the batch run is stopped. Actavis uses two key suppliers for compression machinery, PTK and Courtoy tablet presses, which are in service 24-hours a day. A further two are ready to go into production which makes this the largest fleet of PTK machines on any production site in the UK.

The packaging area has evidence of previous and continuing investment. It has 12 blisterpack lines and two bottle packing lines. “The operators are in charge of the packaging process, through touch-screen control panels,” says packaging manager Steve Coram. Machines weigh and check the materials and can detect fluctuations in individual tablets down to infinitesimal amounts – deviation from the standard triggers a quality assurance investigation. Blisterpacks have been adopted due to legislation – the drive was to ensure that every patient gets a leaflet, with usage instructions and contra-indications, with every prescription. Up until 1999, the majority of product was packaged in pots.

“The packaging area was extended in 1999 to take on blisterpack production,” Mr Coram adds. “It was a huge investment, and it’s ongoing. We have been buying new machines about every eight months – the next one will cost around £1.8 million, but it will go twice as fast. We also keep around £2 million to £3 million of tooling equipment readily available. Since the switch to pots we have come to be seen as a centre of excellence for packaging. The quality of the site is, arguably, among the best in the UK – I have visited other sites and I can say that with confidence.” There is no boastfulness in his tone of voice; he is simply stating facts.

Returning to the office, we discuss how the plant has changed with the improvement efforts and the impact of the investment programme that currently totals around £20 million, in existing facilities and planned upgrades.

ActavisGlobally competitive
“In terms of output, we’re probably producing around forty per cent more today than we were doing 15-years ago,” says Daniels. “We have gone from being a relatively small, cottagestyle industry to a highly efficient manufacturing site. That’s the key difference: we are very competent and up there with the best.” The site has to be. As I am continually reminded, Actavis Barnstaple is in competition with low cost areas all over the world. “We have a separate purchasing team that deals with all our raw materials and packaging, both globally and locally. As part of a large group, we get the benefits of purchasing on mass, as well as having local relationships.” But if materials are sourced from the other side of the world, how does the company ensure its supply chain is not ‘pregnant with inventory’ – that it achieves the Goldilocks balance? “It depends on the molecule,” he replies. “We will want to have some overstocked, to ensure we always have adequate supplies. We dual-source other products, so that if one vendor goes down for any reason we have another supply available. It is all part of our BCM (business continuity management) strategy.” The skill is knowing where in the supply chain to hold inventory, says MD Sara Vincent. “The stock we hold depends on the product, the source or whether we are in a new product launch, in which case we could hold as much as six months supply of finished goods,” she says.

This illustrates that for companies on this scale, purchasing and supply chain management is a discipline all of its own. Management of supply and distribution of finished goods is outsourced to DHL, who operate a warehouse near Banbury. They provide what Ms Vincent described as ‘elastic walls’ for inventory management.

Actavis in Barnstaple was recently recognised as North Devon’s Business of the Year. The location may seem remote to some but it is a growing generics pharmaceutical company, with a strong pipeline and expanding market share. Its strategy is based on breadth as well as depth of product lines. It competes with other facilities within the Actavis Group, so it has to make a strong business case for investment and must be competitive. And the location has definite benefits, as well.

“North Devon isn’t just about tourism,” Vincent says, inferring that the area is attractive to personnel. “We have not struggled with recruitment, and we have hired 200 people in the last two years. We are embracing apprenticeships, from technical areas to engineering applications. We haven’t found it a huge problem to recruit within the area, or to attract people from other parts of the country and even the rest of the world.”

Actavis – at a glance

Location
Barnstaple, North Devon

Managing Director
Sara Vincent

Operations Director
Keith Daniels

Employees
650

Production personnel
c. 400

Product
Generic medications in ‘dry’ (tablet or powder) form

Output
Over 5 billion tablets per annum, using 1.3 million lbs of raw materials/yr

Principal product lines
Levothyroxine; digoxin; prednisolone; analgesics

Markets
85% UK

Main customers
The National Health Service