Life sciences: is growth putting operational capex at risk?

Pharmaceutical manufacturers have spent five years chasing growth. Now ageing infrastructure is calling in the debt. This article looks at strategic capex management and resource planning in life sciences manufacturing, and how to balance growth ambitions with the long-term performance of existing assets.

Growth has defined pharmaceutical manufacturing over the past five years. New facilities, expanded capacity, technology transfers and complex product portfolios have dominated boardroom agendas. 

While this focus is understandable, it has not been without compromise. Many existing sites are being asked to support increasingly complex manufacturing operations, often relying on ageing assets and infrastructure that weren't designed for today's demands. This growing mismatch is making it harder to maintain reliable, compliant operations, let alone meet the requirements of Pharma 4.0 (digitalisation standards for pharmaceutical manufacturing). 

Operational capex is rarely questioned in principle. But in practice, major strategic growth programmes often take priority. Essential infrastructure investment has to compete for the same funding, engineering resources and management attention and the result is a growing backlog of utility upgrades, infrastructure renewal projects and compliance-driven improvements, all essential to maintaining the licence to operate. 

Why does operational capex trail in the race for resources?

The challenge our clients describe isn't a lack of funding. It's more often competition for resources. Major expansion projects absorb the time and expertise of capital project leads, commissioning, qualification and validation teams and engineering specialists, leaving limited capacity to progress essential upgrades and asset replacements within existing operations.

Without a clear, current view of asset condition and remaining life, it's difficult to identify which investments are most urgent and build the case for prioritising them. Meanwhile, every new facility adds to the portfolio of assets requiring ongoing investment, stretching already limited resources even further.

Operational capex urgently needs its own visibility, separate from major capital programmes. 

Can dedicated governance restore balance?

Operational capex works best when it has its own governance structure, decision-making criteria and cadence, separate from major growth programmes. Prioritising investment by regulatory compliance criticality, patient impact, business continuity risk and asset lifecycle through a dedicated forum – built specifically for sustaining investment – stops it competing for attention alongside headline-grabbing expansions.

The aim isn't to isolate operational capex, but to give it the attention and decision-making framework it needs – governed on its own terms and judged against the right criteria rather than the financial metrics used for growth projects. This approach also protects the needs of the operational capex stakeholders who are accountable for maintaining a safe, compliant and functional site.

Why asset management is the cornerstone of effective site maintenance? 

Organisations cannot prioritise what they cannot see. Effective asset management, supported by accurate asset registers, condition data and remaining-life assessments, provides the evidence needed to justify investment in ageing assets.

Strong asset management data, combined with input from facilities management partners and operational stakeholders, lets teams validate priorities early, so delivery partners can plan for the resources and capabilities they’ll need. 

How does long-range capital planning enable prioritisation?  

Multi-year, portfolio-wide planning translates asset data into a prioritised, costed view of capital requirements across the network. It gives leadership a realistic picture of where and when to invest, and how much capital is needed over time.

Rather than reacting to deviations, inspection findings or equipment failures, the most effective organisations maintain a long-term view of asset health and act proactively before risks affect operations or attract regulatory attention. They also separate compliance-critical investment from discretionary reliability improvements, so each follows its own approval criteria and funding pathway.

This protects essential compliance work from competing against growth investment on the wrong terms. Managed well, with reliable asset data behind it, this approach also helps clients understand what funds are available to support business investments such as new facilities or upgrades.

Effective organisations also treat capital planning as a continuous process throughout the financial year. This involves clearly defined but adaptable requirements, accurate cost estimates, rigorous cost control and effective cash flow management.

Access to reliable, up-to-date cost data, supported by digital tools and effective governance, is essential to keeping capital plans on track and measuring returns on investment.

How can the right delivery model unlock capacity?

Even with the right priorities in place, sustaining projects still need to be delivered, and that's often when capacity constraints bite. A single delivery partner with the ability to operate through a range of delivery models aligned to the needs of the programme is key. 

We’re seeing growing use of turnkey or principal delivery models as a means of directly addressing capacity constraints and reducing the burden on internal teams. A single accountable partner takes responsibility for delivery, freeing teams to focus on operations while ensuring that the programme meets regulatory requirements. 

On one global life sciences programme that we delivered under a principal model, the result has been more than US$25 million in client-recognised and validated value since 2020, fewer scope, cost and schedule surprises and utility shutdowns completed without service interruption. For organisations managing a high volume of small to mid-sized sustaining projects across multiple sites, this model frees up engineering and management time that would otherwise be spread too thin.

Five priorities for leadership teams

To improve operational capex performance:
1.    Develop a risk-based prioritisation framework that considers compliance, patient impact and operational continuity.
2.    Build a rolling multi-year capital plan informed by asset condition data.
3.    Evaluate turnkey or principal delivery models to strengthen internal capability.
4.    Use reliable benchmark data to establish baseline costs, and manage expenditure and cash flow with digital tools and smart governance that enable informed decision making. 
5.    Align workforce planning with capital planning to ensure resources are available across both growth and operational activities.

What will the next five years demand? 

Pressure on operational capex is likely to increase over the next three to five years as more new facilities move into operation, regulations shift and technology rapidly evolves. 

Predictive maintenance, digital twins and asset intelligence platforms will move from innovation initiatives to core compliance tools. And the implementation of Annex 1 (EU GMP guideline for the manufacture of sterile medicinal products) will continue to expose infrastructure gaps in ageing sterile manufacturing facilities, forcing investment decisions that can no longer be deferred. 

For many organisations, the constraint won't be capital, but rather the people and expertise needed to deliver. We expect this to accelerate a shift towards outsourced delivery models, with organisations focusing their own teams on operations and oversight.

The life science companies best placed to meet these challenges will be those that proactively build dedicated governance, invest in asset visibility and adopt delivery models to supplement internal capacity. Together, these measures will help protect compliance, reliability and resilience across their portfolios.