Business Insight 31st Jul 2015

Is localisation the future of regenerative medicine?

Advances in technology are fundamentally changing the way many industries operate – and in healthcare, the changes are potentially life-saving and good for the Australian economy.

In a world where the outsourcing of manufacturing to foreign companies is the norm, the idea of adapting a localised approach to manage the development and distribution of new sophisticated stem-cell based therapies seems absurd. However, according to Dr Peter O'Neill, 'going personal and local' could be an answer to providing cost-effective solutions to an overburdened health system.

Regenerative medical therapies, using human stem cells, are breaking through from expensive and often inaccessible interventions, to genuine healthcare solutions provided by local health companies.

Regenerative medicine

One drug suits all vs custom-made healthcare

These regenerative therapies are complex and difficult to manufacture to precise measures demanded by regulators in Australia and other western nations.

The traditional pharmaceutical 'product' is a 'one drug suits all patients' approach. Products are approved according to the specific chemical, manufacturing and distribution processes advised to regulators. Any deviation can result in the loss of licensing for that product. Pharmaceutical manufacturers have therefore developed sophisticated processes and quality systems that have enabled reliable production at a massive and centralised scale.

Dr O'Neill advocates that regenerative therapies which are custom-made to each individual patient are the future. These therapies will use a patient's own stem cells as their base. They could require careful transport between patient and laboratory, where the cells are 'transformed', and then transferred back into the patient's body. However each supply chain movement adds to the price and thus reduces the availability of what could be vitally important healthcare solutions.

"You could imagine that having to transfer that material from Australia to Asia and then back again would substantially add to the cost of the treatment," Dr O'Neill says.

These issues are not about medical science, but rather supply chain and business management challenges that need to be addressed strategically.

Dr Peter O'Neill

Department of Management

They are some of the challenges that Dr O'Neill and his team at Monash University have been working on with colleagues at the UK's Newcastle University and National Biologics Manufacturing Centre.

"Some of the medical science is already here," he says. "The regenerative medicine industry needs to develop ways of distributing its products safely and efficiently, and in line with relevant regulations."

Rather than long complex supply chains, Dr O'Neill says a unique business model with on-premises 'manufacturing', may prove to be the most effective distribution plan for personalised therapies.

He envisages dozens of healthcare centres scattered through commercial and residential areas of a city or region. These facilities would offer both consultative (specialist and general practitioner) services and regenerative medicine laboratories onsite. This would mean transportation of cell material can be kept to an absolute minimum.

"A doctor could recommend a particular regenerative therapy, and order it from the lab, possibly in the same building. The lab could produce a custom product, e.g. an 'autologous' remedy, using a patient's own cells, and have it ready for the patient on the same day."

He says advanced manufacturing techniques, including sophisticated robotics, could be successfully applied to the low output but high-value laboratory work involved in regenerative medicine. This would ensure each product was produced in line with an approved regulator process.

Some first steps; small yet efficient

Contrary to many thoughts on the economies of scale, smaller does not have to mean less efficient.

"It can also mean more tailored, personalised products delivered on demand, at reasonable price points."

Dr O'Neill admits it will likely be a slow, economic transformation – but he notes that the pieces of the puzzle are being assembled now. Franchise business models, for example, are providing an ideal management system for a large number of similarly-combined laboratory and practitioner facilities.

"It is up to both the science and engineering communities to work together on effective therapeutic solutions," he says, noting that medical innovation also requires commercial application in order to succeed.

"Only therapies that deliver affordable and life-changing medical treatments to patients will be successful in the coming decades," Dr O'Neill says.

Dr O'Neill comes from an engineering background and spent 20 years as a project manager across the construction and manufacturing industries. He is currently a senior lecturer in the Department of Management.

By Paul Howell

  • Peter O'Neill

    Dr Peter O'Neill

    Senior Lecturer Department of Management

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