New report examines pharmaceutical water, wastewater treatment

According to a new report, Treating Pharmaceutical Water & Wastewater - A North American Perspective by Eric Meliton, Environmental & Building Technologies Group, Frost & Sullivan, as of 2006, the estimated total of global revenues generated by the top ten pharmaceutical drug manufacturing companies is approximately $382 billion. 40 to 60 percent of global revenues are generated by North American firms...

• $382 billion revenue dollars generated by global pharmaceutical firms

March 13, 2008 -- According to a new report, Treating Pharmaceutical Water & Wastewater - A North American Perspective by Eric Meliton, Environmental & Building Technologies Group, Frost & Sullivan, as of 2006, the estimated total of global revenues generated by the top ten pharmaceutical drug manufacturing companies is approximately $382 billion. 40 to 60 percent of global revenues are generated by North American firms.

According to the U.S. Census Bureau, the states of California, New Jersey, and New York have the most pharmaceutical manufacturing facilities in the U.S. In total, there are ten states which represent more than half of the total U.S. pharmaceutical drug manufacturing industry, which is shown in Figure 1.

The current trend in the pharmaceutical drug manufacturing industry has been to move manufacturing practices to off-shore locations in South America and Asia. This particular industry trend towards off-shore facility installations could have negative short-term effects influencing reduced capital expenditures for new equipment installation and new building construction. The move to off-shore locations stems from the ever increasing costs to treat pharmaceutical water and wastewater, combined with the increasing costs for manpower, fuel, and process ingredients. It currently costs between $20-60 / 1000 gallons to treat purified water used for manufacturing while it costs between $1-39 / 1000 gallons to treat manufacturing wastewater.

In the short-term, the pharmaceutical drug manufacturing industry will continue to grow in North America. Research & development into advances in drug formulations combined with the gradual increase in the generic drug manufacturing industry will continue to drive the need for water and wastewater treatment applications. The long-term requirements of the water and wastewater industry will continue to be driven by regulatory requirements not only for the pharmaceutical space, but in all sectors of industrial manufacturing.

The North American pharmaceutical manufacturing industry has three relevant treatment market segments. These include high purity water treatment, wastewater treatment, and the turn-key solutions and operations & maintenance service providers. According to Figure 2, the relevant North American pharmaceutical treatment market segments represent approximately $350 million as of 2007.

Regulatory compliance requires time, money, and energy
The pharmaceutical drug manufacturing industry is highly regulated. Official monographs exist that provide purity guidelines related to the type of water used for manufacturing purposes. There are also permit programs that are in place which monitor the wastewater effluent discharges as a direct result of manufacturing.

Embedded into these regulations are levels of validation requirements, documentation standards, and equipment and process design specifications. In general, regulatory requirements and the subsequent efforts required to maintain compliance consume a great deal of time, capital, and manpower.

Here is a brief overview of some of the water and wastewater regulations affecting the pharmaceutical drug manufacturing industry:
• USP 23 Official Monograph for Purified Water
-- Purified water must be obtained from water which complies with the U.S. EPA National Primary Drinking Water Regulations
-- Purified water cannot contain added substances
-- Purified water must be obtained by distillation, ion-exchange, reverse osmosis, or any other suitable treatment process

• USP 23 Official Monograph for Water for Injection (WFI)
-- WFI water must be obtained from water which complies with all of the USP monograph requirements for purified water
-- WFI water must meet the requirements of a specific bacterial endotoxin test

• U.S. EPA - Pharmaceutical Manufacturing Point Source Category (40 CFR Part 439)
-- Regulation responsible for the control of both effluent discharges and air emissions related to manufacturing practices

• National Pollutant Discharge Elimination System (NPDES) Permit Program
-- U.S. EPA requires a minimum level of treatment for various industrial point sources, including that of pharmaceutical manufacturing point sources
-- U.S. EPA selects its industrial treatment level requirements based on the performance of process and treatment technologies specific to the pharmaceutical manufacturing industry
-- U.S. EPA does not mandate specific technology to be used, allowing for pharmaceutical manufacturers to select the types and methods of effluent treatment techniques to meet their limitation requirements

Market Overview -- Water, Wastewater, and Turn-Key Solutions and Operations & Maintenance
The North American pharmaceutical water treatment and wastewater treatment equipment markets have over 30 industry participants. Leading companies that participate in this market enhance their overall market share by being able to provide a multitude of advanced product technologies and utilize their brand recognition and overall reputation.

Technology developed for these market segments should be able to perform at a high level, with strong core design capabilities contributing to overall reliability and durability. Ultimately, the ability to provide a superior product at competitive pricing is still the major factor that facilitates market share gains in both treatment segments.

The pharmaceutical turn-key solutions and operations & maintenance market is somewhat different. Within this marketplace, there are over 40 industry participants without a defined leading company capturing the lion share of the market.

There is a potential for current solution providers to create initiatives to capture more market share as the market continues to grow in the long term. Being able to provide superior services at competitive pricing while building consistent business partnerships with pharmaceutical drug manufacturers are both major factors that are conducive to market share growth in this industry segment.

There is a potential for current solution providers to create initiatives to capture more market share as the market continues to grow in the long term. Being able to provide superior services at competitive pricing while building consistent business partnerships with pharmaceutical drug manufacturers are both major factors that are conducive to market share growth in this industry segment.
To access the report, see: "Treating Pharmaceutical Water & Wastewater - A North American Perspective"

What are the next steps?
According to Frost & Sullivan, the total North American pharmaceutical water, wastewater, and turn-key solutions and operations & maintenance market is experiencing medium growth. This is true for both the short term and long term forecast predictions as shown in Figure 2.

To increase total market share in any of the three industry segments, the following key strategic recommendations can be incorporated to address the various industry needs:
• An understanding of key water treatment regulations
• Being able to provide cost effective water treatment solutions
• Establishing brand recognition and market awareness
• Design of treatment technology with specific effluent regulations in mind
• An awareness of pharmaceutical drug manufacturing regulations
• Increased funding into research and development
• Strong capabilities in design and fabrication of treatment equipment and systems
• Providing a variety of customized solutions, enhancements, and deliverables
• An awareness of industry trends towards green technologies


Also see:
-- ANALYST BRIEFING: Can the North American Pharmaceutical Water & Wastewater Treatment Market Sustain Future Growth?
-- "Pharmaceuticals Industry: Water & Wastewater Treatment" [Industrial WaterWorld, Jan. 2006]

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