Lifecycle Cost Analysis for Single-Use Systems

Abstract

The decision to use single-use systems for manufacturing pharmaceuticals hinges on many factors, but the major driving force is a desire to save cost and time. Although there is no doubt that single-use systems reduce capital costs, this analysis shows that in many cases lifecycle costs increase. This article describes a methodology used during concept design to evaluate lifecycle costs of single-use systems. The methodology is implemented in a case study to determine the optimum mix of stainless-steel and single-use systems for a new biopharmaceutical manufacturing facility. Lifecycle costs, expressed as net present value (NPV), are evaluated for typical bioprocess applications including fermentation, recovery, purification, media and buffer prep, and buffer storage.

Single-use systems offer many advantages over conventional stainless-steel systems and have rightly gained wide acceptance in the biopharmaceutical industry. Advantages such as increases in batch success rate, eliminating potential cross contamination, more rapid changeover between campaigns, reductions in water and waste water requirements, and eliminating clean-in-place (CIP) and steam-in-place (SIP) validation have all been cited as reasons for using single-use systems. However, one of the primary drivers for implementing these systems continues to be the desire to reduce project cost and time.

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Although there is no doubt that using single-use systems reduces capital costs, this article shows that in many applications, capital savings are offset by increased operating costs. Therefore, lifecycle costs for many single-use applications are higher than for conventional stainless-steel systems. Lifecycle costs vary depending on how single-use systems are implemented, and also with the location of the facility. Capital, labor, and utility costs vary greatly between the United States, Europe, and Asia. A single-use application that reduces labor hours by 20% may make economic sense in one location but not in another. Similarly, capital savings associated with single-use systems will depend on the geographic location of the facility, and whether the equipment is sourced locally or is imported.

Generally, less complicated single-use systems such as simple storage bags for media and buffer have more favorable lifecycle economics than single-use technologies designed for more complex applications. This is because the low replacement cost of single-use components compare favorably with the cost to maintain and clean stainless-steel equipment. On the other hand, lifecycle economics for more complicated single-use applications such as bioreactors and fermenters is less clear because of the high cost of the single-use components.

In this article, we describe a quick method for evaluating lifecycle costs for single-use systems compared with their more conventional stainless-steel counterparts. Because the decision to use single-use systems needs to be made at the beginning of any project, our evaluation is done at a level of detail suitable for concept design. The methodology is then implemented in a case study to determine the optimum mix of stainless-steel and single-use systems for a new biopharmaceutical manufacturing facility. Lifecycle costs are evaluated for typical bioprocess applications including fermentation, recovery, purification, media and buffer preparation, and buffer storage.

Disposables Versus Stainless-Steel Systems

Decisions to use single-use systems should be made early in a project, typically during conceptual engineering. Single-use systems have a large impact on the layout of a facility and also may affect automation strategies, clean utility requirements, floor-to-floor heights, project timelines, procurement schedules, and even area classifications like heating, ventilation, and air-conditioning (HVAC) design. Facilities that use only single-use processing sometimes realize substantial advantages over conventional designs, but tend to be limited in scale.¹ Most biopharmaceutical facilities use a mixture of stainless-steel and single-use systems and for these facilities, an analysis of lifecycle economics can help determine the optimum mix.

Estimating Capital Costs

Capital costs for single-use systems are always lower than for conventional stainless-steel systems, so evaluating lifecycle economics comes down to comparing differences in operating cost versus the cost of capital. In conceptual design, capital costs are estimated from equipment cost using the Lange factor, which is an empirical multiplier that accounts for the cost of installing the equipment. Lange factors vary depending on the type of equipment and whether it arrives as a preassembled skid or as individual equipment items that are assembled in the field. The factor accounts for all direct costs associated with equipment installation including setting up the equipment, utility and process piping hookups, and automation.

Table 1. Capital savings for single-use buffer bags

Table 1 shows how the Lange factor is used to estimate capital-cost savings for a simple scenario involving replacing multiple stainless-steel buffer hold vessels with single-use bags. By doing so, not only are we able to delete the stainless-steel buffer hold vessels, but also we are able to delete two CIP skids and their corresponding infrastructure. The single-use case still has some capital cost (for bag holders) but its Lange factor is much lower than for stainless-steel vessels, reflecting the bags' simpler installation. The total direct capital cost savings for this alternative are just over eight million dollars.

Table 2a. Estimated facility and HVAC costs (USD)

Often, the use of single-use systems affects either the area required in a facility or the cleanliness classification of that area. For the above alternative, using single-use bags eliminated 1,100 square feet of grade D space, which originally contained the stainless-steel buffer hold vessels but added back 1,075 square feet of controlled not classified space for storing single-use bags. These changes affect both capital and operating costs that are quickly estimated from rough order of magnitude benchmarks in Tables 2a and 2b. Experience suggests each added square foot of cleanroom space also contributes additional mechanical space, which is included in Table 2b. Capital and HVAC costs are calculated for a base location and discounted 25% to adjust for the local market. For this alternative, savings in facility costs are a relatively small ($58,000) with an annual savings in HVAC costs of $791.

Table 2b. Difference in facility space costs as a result of implementation of single-use systems. Only ISO 9 (Grade D) and controlled not classified space are affected, along with space needed in mechanical areas as a result of decreased HVAC needs by reducing cleanroom space.

Comparing Operating Costs

Comparing operating costs for stainless-steel and single-use systems is more complex as can be seen in Tables 3a, 3b, and 3c. Operating costs are calculated for the first 10 years of plant operation beginning in 2010. Operating costs such as water, personnel, and utilities should be escalated at a percentage rate that reflects local market economic conditions.

Table 3a. Rates used to estimate operating cost savings for single-use systems: Items for which costs are assumed to increase over time.

Plant capacity (number of fermentation batches) increases over the 10-year period, which is typical for many facilities. Plant capacity change over time is an important part of operating cost evaluation because capacity directly affects the cost of the single-use systems. Many operating costs for conventional stainless-steel systems also increase with increasing plant capacity (water, CIP chemicals) but some, such as the cost of routine maintenance, commissioning, validation, HVAC, and capital, do not.

Table 3b. Rates and quantities used to estimate operating cost savings for single-use systems: Items which are assumed to be constant or which only affect the first year.

Moreover, the cost of WFI used in 2010 is five cents per liter. In much of the published literature, the cost of WFI is taken to be anywhere from 50 cents to one dollar per liter. Our experience is that these numbers overestimate the cost of WFI from a bulk generation and distribution system and unfairly slant many operating cost evaluations in favor of single-use systems. Five cents per liter is an all-in cost that includes the cost of capital, maintenance, validation, quality assurance, utilities, and waste-water discharge. It can be argued that the incremental cost of WFI is even lower because the facility is likely to have a bulk WFI generation and distribution system anyway to provide water for process as well as CIP of any remaining stainless-steel equipment. In this article, however, the price of WFI covers the total capital and operating costs of the bulk system.

Table 3c. Estimated operating cost savings for single-use systems

Significant savings are projected in commissioning and qualification for this alternative, which is typical for single-use applications. We apply this as a one time savings in 2010 only. Experience is that ongoing validation costs for single-use and stainless-steel systems are similar.

The simple scenario described above, using single-use bags for buffer hold, realizes significant labor savings as a result of the way the single-use storage bags are used. For the stainless-steel case, each buffer was prepared for a single purification lot. In the single-use case, buffer is prepared in larger batches and aliquoted into single-use bags for multiple purification lots. This reduces the number of buffer preps required per week with corresponding savings in personnel, QA, CIP, and dispensing. We take credit for savings only when we have reduced operating hours sufficiently to eliminate a full time employee (FTE). The thinking is that saving only a few hundred hours doesn't reduce operating costs but merely lightens work schedules.

As Table 3c shows, operating cost savings for this scenario vary by year with a maximum savings of $383,000 in 2010 and a loss of $57,000 in 2013. The high savings in 2010 reflects the one time credit for savings in commissioning and qualification. For this alternative, savings increase as plant capacity increases, indicating the replacement cost of the single-use systems is less than the CIP and labor costs of the stainless-steel systems.

Calculating Lifecycle Costs

Table 4 indicates how capital and operating costs are combined to calculate a lifecycle cost expressed as net present value (NPV). The NPV reflects the sum of cash flows for each of the 10 years studied; each of the cash flows is discounted and expressed in today's dollars. The combined capital savings from Tables 1 and 2b show up as a negative capital outlay (capital savings) of $8,122,000. Operating costs and savings from Tables 2b and 3c are calculated for each of the 10 years studied. Capital cost is straight-line depreciated over 10 years. A corporate tax rate of 10% is used to adjust incremental profit or loss and a discount rate of 10% is used to account for the cost of money. These factors vary widely between companies and locations, especially tax rates which often reflect incentives from local governments. The calculated NPV for this alternative is an impressive savings of eight million dollars. This indicates the use of single-use bags to supply buffer is a clear winner over the stainless-steel buffer storage tanks.

Table 4. Lifecycle cost worksheet Year

Assessing Various Combinations of Stainless-Steel and Single-Use Equipment

For our case study, this methodology was used to evaluate lifecycle economics for other single-use alternatives as shown in Table 5. For each scenario, NPVs were calculated for three different capacity scenarios, including the base projection from Table 3c, a more conservative scenario involving fewer batches (downside), and a more optimistic scenario (upside).

Table 5. Lifecycle cost analysis of single-use scenarios

Scenario 1 examines replacing a seed train consisting of a 50-L and 250-L stainless-steel fermenter with a single 250-L single-use fermenter. In this scenario, the single-use fermenter would be inoculated initially at a 50-L volume and then topped off with additional media to produce 250-L of seed. It was reasoned that spreading the cost of the single-use fermenter bag over the two seed steps would produce more favorable economics than paying for both a 50-L and 250-L single-use fermenter bag. This illustrates an important point in evaluating single-use alternatives, which is that you don't always need to consider a like-for-like replacement. What makes sense in a stainless-steel world may not be the optimum design in a single-use world. Similarly, in the earlier buffer hold example, the favorable economics for single-use bags results mainly from a change in operating philosophy to produce buffer for multiple purification lots at the same time. This makes sense in a single-use world because it doesn't increase capital costs. In a stainless-steel world, costs increase with the size and number of storage tanks.

As Table 5 indicates, Scenario 1 results in positive NPVs ranging from $320,000 at the lowest capacity to over $1.6 million for the upside scenario, suggesting this alternative be incorporated into our design. However, an examination of operating costs indicates the costs are higher for the single-use scenario for all 10 years. This suggests the savings derive from combining the two seed fermentations into a single fermenter, and not from using single-use systems. Based on this information we proposed Scenario 2, which combines the 50-L and 250-L seed fermenters into a single 250-L stainless-steel fermenter. This scenario produces lower less capital savings than scenario one but lifecycle savings are greater, making it the clear winner between the two scenarios.

Scenario 3 examines replacing the stainless-steel production fermenter with a single-use fermenter. Lifecycle costs for this option are very poor and there is a large technical risk because single-use fermenters of the required size are not yet available on the market. The negative economics result from the high cost of the single-use fermenter bags, which are close to $10,000 each.

Scenario 4 examines replacing three large stainless-steel vessels, one of them agitated, and depth filters in the recovery process with single-use systems. At this volume, the cost of single-use mixing bags is quite high, driving the economics to favor stainless-steel. In Scenario 8, we examine the same recovery process but replace just the hold vessels with single-use bags, keeping the stainless-steel agitated vessel. The economics for this option are favorable.

Scenario 5 examines replacing fixed stainless-steel buffer and media-preparation tanks with single-use mixing systems. Here again, the optimum design for single-use systems is very different than for stainless steel. The stainless-steel design includes separate media and buffer preparation suites with separate gowning and material airlocks and separate air handlers. In the single-use design, we combine media and buffer preparation into a single suite because the risk of cross contamination is eliminated. We also reduce the number of preparation systems from seven to four, reflecting the higher productivity of the single-use mixing equipment. This resulted in significant savings in capital costs, operating personnel, and HVAC costs. However, these savings were dwarfed by the high cost of single-use mixing bags, resulting in negative NPVs for all capacity scenarios.

Scenario 6 is the buffer hold case study described earlier, and Scenario 7 uses single-use bags to hold intermediate product after various purification unit operations. Both of these scenarios use relatively inexpensive single-use storage bags and result in positive lifecycle economics.

Table 5 shows the importance of evaluating lifecycle costs in determining the optimum mix of stainless-steel and single-use systems. In our case study, if we look at capital savings only, we might decide to incorporate all of the single-use scenarios listed in Table 5. The result is a rough order of magnitude capital savings of $26 million. However, the NPV for these scenarios is a loss of $7 to $13 million. A more optimum solution is to combine scenarios 2, 6, 7, and 8. This results in a respectable capital savings of $18 million and positive lifecycle savings of $11 to just over $16 million.

Impact on Project Timeline

A final and very important financial consideration is the impact of single-use systems on project timeline. In many instances, the financial impact of getting to market faster dwarfs the lifecycle savings we have been discussing so far. The problem is that it is often very difficult to determine the impact of replacing a given piece of stainless-steel equipment with single-use systems on the overall project timeline. The reduced delivery time, installation, commissioning, and qualification of single-use systems shortens project timeline. However, the overall project timeline might still depend on long lead times for stainless-steel equipment for which there is no suitable single-use replacement.

For projects where time-to-market is an important consideration, we recommend performing the analysis described in this article, then evaluating the alternatives with negative NPVs based on their potential to affect the overall project schedule. For example, alternative five shows a negative NPV for single-use media and buffer preparation. Typically, stainless-steel media and buffer preparation equipment is not on the critical project path and replacing it with single-use mixing bags is not likely to accelerate the overall project timeline. Therefore, alternative five might still be rejected. However, stainless-steel fermenters are often on the critical project path, so alternatives one and three might be reconsidered if speed to market were an important driver.

Conclusions

Lifecycle costs are an important consideration in evaluating single-use systems against conventional stainless-steel designs. Generally, the less expensive single-use components provide more favorable economics. Simple storage bags for media, buffer, or intermediate product generally have positive economics when compared to stainless-steel vessels for the same purpose. The high replacement costs for more complex single-use systems, such as large mixing bags or bioreactors, tend to offset any savings that might be realized. However, the economic benefits of getting to market faster can dwarf lifecycle costs, and therefore, the impact of single-use systems on the project timeline needs to be considered where time to market is a significant driver.

Barak I. Barnoon is associate director of process engineering, Biotech Technology and Engineering (BTE), Wyeth Biotech, 978.247.4746, bbarnoon@wyeth.comBob Bader is a senior manager of technology at PharmaBio, Jacobs Engineering.

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