Turner & Townsend releases 2021 Pharma Sector Construction Benchmark Analysis
Source:

Turner & Townsend

January 21, 2021

Turner & Townsend releases 2021 Pharma Sector Construction Benchmark Analysis

New study benchmarks cost and time to build, suggests opportunities to improve speed-to-market of facilities and lifesaving pharmaceuticals.


January 21, 2021

 

Fast Facts:

Global professional services firm, Turner & Townsend, analyzed a selection of 20 large scale (>100 million USD) pharmaceutical construction projects completed across the USA, Europe, and Asia, and found that an estimated 70% of pharmaceutical construction projects exceed their original budget by an average of 15%. The firm also found that projects missed their planned schedule target by an average of four months due to delays during the commissioning, qualification, and validation phase at the end of a project.

In our experience, of the projects which go over budget, around 90 percent of them do so on the process equipment, clean utilities and mechanical, engineering and plumbing (MEP) spend. Combined, these elements make up 44 percent of total project cost on average and, added with building scope, roughly 50 percent of schedule.

How can we get lifesaving drugs to market sooner?

With the world undergoing massive socio-economic and demographic change, compounded by the impact of the COVID-19 pandemic, the global population needs an increasing variety of medicines, treatments, and vaccines to be delivered faster and more cheaply than ever before.

Despite this, ‘big pharma’ companies have been unable to significantly increase new drug output over the past decade. Drug approval in the world’s largest pharmaceutical market, the USA, continues to average at around seven to 12 years, and the estimated average cost of taking a new drug from concept to market is about $1.3 billion USD.

However, increased pressure to drive greater efficiencies and savings which can be passed onto consumers through lower drug prices is not being met with improved construction performance. Both from Turner & Townsend’s project experience and analysis of publicly reported projects, the firm estimates that 70 percent of pharmaceutical construction projects miss their original budget target by around 15% on average, with delays of about four months on a typical three-year project schedule.

Why do new facilities take so long?

The firm’s research found this is typically driven by overspending and delays during the commissioning, qualification, and validation phase (CQV) at the end of a project, plus a failure to accurately anticipate the time and resources needed to complete utility and mechanical, engineering and plumbing (MEP) work. As a possible remedy, the firm is calling for the industry to come together and share benchmarking data across construction projects.  Not only would this help to improve the way projects are estimated and planned, but it allows the key risks to cost and schedule overruns to be identified and avoided.

Jason D’Orlando, Vice President at Turner & Townsend, said:

“In the wake of the COVID-19 pandemic, the pharmaceutical industry is under the spotlight – and global pressure – like never before.  With the overriding need to improve the speed to market of life-saving medicines, now is the time to see real industry change in the development of new manufacturing space to live up to the dynamism of the pharmaceutical industry.

“By planning more thoroughly at the earliest stages of capital projects, and applying robust industry benchmarks, pharmaceutical companies can better avoid damaging cost and schedule overruns at a time when these simply cannot be afforded. The industry needs to come together to improve visibility and predictability on cost and risks if we are to deliver more manufacturing capability for the global pharmaceutical sector at pace.”

Read the full research article:

How data can improve pharmaceutical construction project performance | Turner & Townsend (turnerandtownsend.com)

###

For more information:

Christopher Villari, Head of Communications, Turner & Townsend

phone: +1 917 940 5963

Christopher.Villari@turntown.com

 

About Turner & Townsend: Turner & Townsend is an independent professional services company specializing in program management, project management, cost and commercial management and consulting across the real estate, infrastructure and natural resources sectors. With 112 offices in 45 countries, we draw on our extensive global and industry experience to manage risk while maximizing value and performance for our clients.

www.turnerandtownsend.com

Post a Comment

You must be logged in to post a Comment.

FEEDBACK