Manufacturing can be hard. It can take lots of little decisions to get everything right. Throwing in living, unpredictable organism, and it gets even harder. I am not talking here about assembly line workers. I’m talking about microorganisms. That’s the problem that Genzyme has had. Genzyme specializes in biopharmaceuticals and thus depends on tiny organisms to get things done. When those things catch a virus, it can shut down an entire factory. We wrote about this back in October, and now the New York Times reports that they have yet to fix the problem (Genzyme Drug Shortage Leaves Users Feeling Betrayed, Apr 15).
Last June the company temporarily shut its main factory in Boston because of contamination from a virus. Such problems can arise in biotechnology factories, which use living cells to make drugs, and few faulted the company at the time. But Genzyme, which initially predicted that the drug shortages would last six to eight weeks, has repeatedly backtracked on when supplies would be fully restored, as it has run into further manufacturing problems. At one point, particles of steel, rubber or fiber were found in some vials of the drugs.
The company has paid a pretty serious price for this. It’s stock has been hammered, and it has Carl Icahn making noise. Further, other drug firms have begun to produce competing medicines that may cut into Genzyme’s long-term sales. And these are small markets. The affected medications are for rare genetic conditions. When Wyeth makes a bottle of Advil, they have effectively no idea to whom that medicine is going. Genzyme, however, is essentially on a first name basis with its clients.
That is in part because there are only 1,500 Cerezyme users and fewer than 1,000 Fabrazyme users in this country. It is also because the drugs are so expensive — about $200,000 a year. Many patients turn to a Genzyme case worker to help them secure insurance or financial aid.
That has raised some interesting allocation issues. Genzym’e drugs don’t cure these diseases (Cerezyme treats Gaucher disease, and Fabrazyme is used for Fabry disease). Rather they manage the conditions so patients are on board for the long haul. If the medicine is in short supply, giving more to one patient means stiffing someone else. From society’s perspective, it would be best to give the available medicine to the first person in most need. Apparently, that is only partial possible:
Genzyme, in consultation with doctors and patient advocacy groups, has allowed those with more severe Gaucher disease to get a full dose of drug. But about 80 percent of the patients got no drug at all for several months late last year. With Fabry, the company decided that there was no easy way to determine which cases were the most severe. So everyone recently has been getting only 30 percent of their usual doses. Company officials and patient advocates say that some women, who tend to have less severe cases of Fabry, have donated their doses to their sons who inherited the disease.
So I find it interesting that this has continued for so long. I understand that biopharmaceuticals is about as hard as it gets in terms of manufacturing but it is still surprising that Genzyme has yet to right the ship. If nothing else, this is a pretty compelling example of how important the nuts and bolts details are in execution. Both Genzyme and its patients have paid a pretty steep price for not being able to get its factory running right.