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Pharmaceutical and Medical Packaging News Magazine
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Originally Published April 2000

PHARMACEUTICALS

Contract Packagers Help Speed New Drugs to Market

Annie Lubinsky, Managing Editor

The practice of contract packaging is growing significantly as pharmaceutical companies focus on their core technologies—including drug discovery and development—and leave other areas—such as packaging—to outside experts. Contract packagers offer a great deal of assistance in launching a new drug, providing everything from stability studies and clinical trial packaging to physician's sample packages and packaging for the product launch.

According to a 2000 study titled Contract Manufacturing in the Pharmaceutical Industry by Pittiglio Rabin Todd & McGrath (PRTM; Waltham, MA), 85% of respondents (pharmaceutical manufacturers) contract out primary packaging, and 78% contract out secondary packaging. The trend of outsourcing packaging is likely to continue, says the study. Companies with a tendency to outsource in the early stages of product development indicated that capacity and flexibility were the main reasons they chose to outsource.

These ideas are echoed by contract packagers, who say that capacity and flexibility are two advantages they offer to their customers, the pharmaceutical companies. "Our knowledge of packaging materials and extensive inventory of stock tooling are additional benefits," says Howard Thau, president of Sonic Packaging Industries Inc. (Hillsdale, NJ).

An additional advantage offered is the expertise or specialization of the contract packager. "Our customers come to us because we offer an exclusive and specialized type of packaging," says Denis Decarie, general manager of Fillab Inc. (Montreal). "Most pharmaceutical companies don't have the thermoforming equipment we have."

The contract packager's expertise can also guide a new pharmaceutical company through the steps necessary to bring a new drug product to market quickly. "If our customer has a new drug under development for FDA submission, we provide clinical packaging for Phase II and Phase III clinical studies," says Paul Alvater, president of PCI Contract Services (Philadelphia). "From those studies, the customer can determine if the drug can be submitted to FDA. Then we help with preparation for FDA submission. After FDA approval, we carry out product launch planning. We work with the customer all the way through clinical packaging to the launch. Our aim is to help our customer get the product to market as soon as possible, because the first company to receive approval for a new drug—and get it to market—will capture most of the market share."

ENSURING SUCCESS

As both pharmaceutical companies and contract packagers are well aware, changes happen constantly during the process of packaging a new drug. How can pharmaceutical companies work with contract packagers to achieve their goals and prevent mistakes?

"You prevent mistakes by working closely with the customer and establishing maximum communication lines among the regulatory, purchasing, packaging engineering and design, operations, and quality departments," says Alvater. "The most successful launch comes from a team meeting where all groups are present. When you get a person from each discipline, the team can make a consensus decision."

The first point of contact between the drug company and contract packager is often the account executive, who will work with the pharmaceutical company's packaging engineers to determine whether the contract packager can meet the goals of the company on time. At this point, many pharmaceutical companies have questions. "They ask about regulatory and compliance, operations, tooling, and our capacity," says Domenic Ciarico, national account manager at American Health Packaging, a division of AmeriSource Health Corp. (Columbus, OH). "We'll ask about packaging specifications and package development. After obtaining the appropriate information and materials, we'll work up a cost model, timeline, and proposal."

Once the decision is made to use a particular contract packager, the account executive may turn over the process to another individual or a team. "At Sharp, a team will work with the pharmaceutical company, and there is an account planner to make sure the project moves through the plant to meet expectations," says Tim McBride, vice president of sales and marketing at Sharp Corp. (Conshohocken, PA). "The planner is the primary point of contact during a project." Sharp is in the process of installing enterprise-wide resource planning software, which will make information available to all parties concerned at all times.

Other contract packagers also use a team approach. "In the past, the salesperson was the go-between; today, it's more common and productive for various segments to talk," says Joe Bell, vice president of operations and COO of Quality Packaging Systems Inc. (Colonial Heights, VA). "The quality experts, designers, engineers, and materials procurement staff exchange information back and forth. Their first step is to work together to be sure the manufacturing regimen, SOPs, and quality control are very similar or identical to the pharmaceutical company's own, so that the company is very comfortable. It's important to build that relationship, because no matter how good your sales force is, if the quality and manufacturing don't mesh with the customer, the relationship won't work."

"The best way to prevent mistakes is to clearly outline what the expectations are up front," says Bob Hargesheimer, general manager at West Pharmaceutical Services (Lakewood, NJ). "Delineate responsibilities for the packager and the customer's personnel. Also, put into practice good, basic project management tools, such as timelining and milestoning. That way everyone gets their part done on time with the proper documentation in place before taking the next step."

Alvater adds that the needs of the particular pharmaceutical company for the particular drug package can vary from year to year, and it's important to plan ahead for that change to ensure the success of the project in the long term. "There is often low volume in year 1," he says. "But will the volume be high later? You have to understand the first year's packaging requirements, but also years 2 and 3. If high volume is anticipated, for example, we'll use high-output equipment. If there will be low-volume requirements, we'll use medium-output equipment to keep tooling costs down."

Bell points out that technology plays an important part in the contract packager's relationship with the pharmaceutical company. "Upgrade your equipment so that you match each other," he says. "You have a better chance of evolving and succeeding. Companies that invest in technology are more likely to succeed. These companies can exchange information instantly, which enhances the relationship and moves projects along at an accelerated rate."

And, finally, remember to educate each other. "We act as a consultant," says Luc Vaugeois, director of marketing and sales at Ropack Inc. (Montreal). "For example, if a company wants a three-color blister package printed on two sides and delivery in 14 weeks, we have to ask which is more important. They can have the package on time or have printing on two sides. We go along with the client's decision, but we educate them so they can make the best decision for the project."

STRATEGIC OUTSOURCING

A continuing trend in contract packaging is strategic outsourcing. According to the PRTM study, "As outsourcing in the industry matures, pharmaceutical manufacturers will select their outsourcing partners strategically and will consider their partnerships to be a competitive advantage." Pharmaceutical companies will "focus on total cost of doing business" and look at "long-term needs and partnerships."

Alvater explains: "The earlier trend was to send only overflow work to a contract packager. Now drug companies use strategic outsourcing, which means they focus on drug development and marketing and sales, while leaving other elements of manufacturing to other companies." The amount of strategic outsourcing for PCI has grown: in 1992, 15% of the company's total sales were from multiyear, long-term agreements; in 1999, that number increased to 47%.

Sharp has also noted an increase in this type of business. "Pharmaceutical companies are looking more and more to the contract packager as a partner on a project," says McBride. "As companies and packagers get to know each other, the packager is becoming a cornerstone partner in the manufacturing process."

According to Bell, "More and more ethical pharmaceutical houses are maximizing their dollars in R&D. The industry is growing rapidly, and these companies are surviving economic fluctuations because if they introduce new products or phase out an old one, they can use a contract packager to handle these transitions. Many functions are very labor intensive and require primary, secondary, and tertiary equipment. The pharmaceutical company's dollars are better spent on R&D than on constantly changing equipment. These companies, as a result, have used contract packagers more and more, and often the packager works in partnership with the company."

A CHANGING INDUSTRY

Another change taking place is that higher levels of quality and service are in demand. "FDA is getting more stringent, which requires us to pursue higher levels of quality," says McBride. "End-users also want higher-quality products."

Bell echoes this. "The consumer is more demanding than ever before. Drugs are taking a more rapid route from discovery to the marketplace. Americans in particular demand high-quality products."

Customers are also demanding a better-educated contract packager. "In the past, customers asked for services. Now they ask for expertise, a higher quality of people to work with," says Vaugeois. "There is a new generation of purchasing agents who are better educated than before. When there's a new generation, you have to change the way of doing business. Now they're more open-minded. They bring expertise to the table, but also listen to others to gain efficiency." Vaugeois continues: "Pharmaceutical companies are more open to exchange between the suppliers and contractors to increase efficiency. For example, a company in New York sent us six or seven new products and said, 'Please advise.' In the past, a company might have sent us a blister package and said, 'Please send a quote.' The relationship becomes an exchange of knowledge in which all parties learn from each other."

ALWAYS PREPARED

Flexibility is the specialty of the contract packager, who needs to adapt to the needs of a variety of companies, different products, and changing goals. "Being able to respond at the last minute is stock-in-trade for a contract packager," says Bell. "As contract packagers, we have the experience, technical expertise, network of suppliers, and a web of constructive and creative resources to let us be nimble and quick in responding to the ever-changing pharmaceutical industry."

"This is a very dynamic business, so it is critical for us to be as flexible as possible to meet a customer's changing needs," says Hargesheimer. "A project can go through a variety of changes throughout its life—the production volume, the graphics, the package, the type of insert, the languages, or text."

American Health Packaging assisted with the launch of a product that required materials that were difficult to obtain. "The lead time for getting the materials was longer than the product demand and the customer's goals and needs," Ciarico says "so we had to research other suppliers and other materials so that we had backup materials if necessary."

Whatever happens, the contract packager is a committed part of the team.

"When we're looking at a product launch, nothing stays the same except the deadline," says McBride. "The artwork, timing, and package format can all change. One call can change the start date or the volume. There are always things that can and do go wrong, but if you have effective communication, you can fix them."

Sharp recently carried out a product launch that was critical to a large pharmaceutical company's success. As the project neared completion, the company's forecast grew significantly, and Sharp needed to dedicate more packaging lines to supply enough product to meet the company's changing goals. Constant communication and teamwork allowed Sharp to meet expectations and stay on schedule, says McBride.

With long-term partnerships developing, contract packagers must stay alert to future changes. "We work with a company for up to two years prior to FDA approval," says Alvater. "We don't know what our order backlog will be two years from now when we package the product for the market. We must make sure we have the available capacity and materials."

A STRONG PARTNER

Both pharmaceutical companies and contract packagers agree they want the best for their product and for the end-user. And many agree that the best way to attain this goal is for each company to use its strength to contribute to the product's value and to support each other. As the relationship between the pharmaceutical company and the contract packager becomes ever stronger and closer, straightforward communication and clear goals will help ensure success.

Vaugeois describes the drug maker­contract packager partnership as a "win-win" situation. "Someone always has to rely on someone else in this industry," he says. "We all need to be strong links in the chain."

PHOTO COURTSEY OF PCI CONTRACT SERVICES INC.