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Balancing Label Quality and Cost

Before switching to lower-cost label materials, packaging engineers should explain their needs to suppliers in order to avoid any costly quality, regulatory, or legal concerns.

Packaging developers and engineers at pharmaceutical companies are in an ever-more-intense bind when it comes to labeling. Chances are they are under pressure from the purchasing department to reduce label costs. They are likely also under pressure from their quality assurance (QA) department not to compromise on label quality or do anything that could lead to labeling errors and costly recalls. And they are hearing from their regulatory department about how to meet FDA's standards, particularly the new regulations on making over-the-counter drug labels more readable.

What is a packaging engineer to do?

While the demands may seem contradictory, there are ways to satisfy all of them. The packaging engineer needs to look at the big picture and work closely with suppliers and various in-house departments to make the labeling process efficient, cost-effective, high quality, and compliant.

DETERMINE WHAT'S POSSIBLE

One of the most important aspects of making the labeling process work is understanding exactly what one's suppliers are capable of. Therefore, supplier audits are crucial, as is constant communication with suppliers.

Outsert labels folded by Vijuk Equipment models add more room for copy.

Many suppliers say they have taken great steps in recent years to improve their efficiencies, from buying new equipment to shortening turnaround time. These developments have been driven by the pharmaceutical companies' demands for higher volumes, lower costs, and greater flexibility. But such progress should not be mistaken for invincibility. There are limits to how much a supplier can produce and how low its prices can become before quality begins to suffer, and a packaging engineer should know what they are even if those limits have not yet been approached.

Some established suppliers say that the competitive bidding process carried out by some drug companies relies too heavily on cost factors and doesn't adequately account for a vendor's capabilities and limits.

"We find ourselves competing with people who are truly not CGMP [Current Good Manufacturing Practice] houses, or who don't put the kind of inspection into it that they should," says Thomas Henderson, vice president of marketing and corporate development for the Nosco Printing Group (Waukegan, IL). "The cost pressures in some cases don't seem to be balancing with the need for care. We're investing in vision technology and in new equipment to enable us to operate more effectively, and we have to meet with customers to explain these things. If the pricing is too low, it will not enable reinvestment on our part."

Packaging engineers should also work with their suppliers on a personal level rather than just on an economic level. "You have to know who you're dealing with and who you're buying from," says Ken Gordon, operations manager, PCI Printed Components (Moorestown, NJ), a division of PCI Services Inc. Personal interaction enables suppliers and engineers to communicate better.

LOOK AT THE TOTAL SYSTEM

Some manufacturers see the label as a commodity whose price can be slashed by pitting one supplier against another. But a better way to control costs is to reevaluate the total labeling system, suppliers say. For example, says David George, director of marketing at Inprint Systems (Sevington, Ashford, Kent, UK), which manufactures the Extended Text label: "We can come up with options that do away with the folding carton and the insert and increase the line speed, and we can work with the pharmaceutical companies to incorporate those into a far-more-efficient process. Another example is to print the labels on a single sheet of paper, which saves costs and enhances quality control (QC) procedures since the base label and leaflet cannot be different. The important thing is to work as a team to come up with a solution and to make it work globally."

Along the same lines, Vijuk Equipment Inc. (Elmhurst, IL) promotes its outsert attachment machine as a means to conserve packaging materials and cut costs. The machine folds leaflets, turning the edges inward, and spot glues them to keep them compact so they can be affixed directly onto pharmaceutical bottles. Another equipment manufacturer, On Serts Systems Inc. (Toronto) has been able to fully integrate labeling operations into the web press, creating efficiencies there, too.

Operator Eleanor Fowler runs outserts on Vijuk's folding unit at PCI Printed Components.

Machinery plays an important role in the cost-quality balance, says Margaret Polt, marketing manager of Challenge Printing (Wallington, NJ). "Our customers are not willing to sacrifice quality in the name of cost cutting," she says. "One way to address their concerns is through purchasing the latest technology. Our newest label press, for example, employs UV flexography and has 16 interchangeable stations. This means quick lead times at reduced set-up costs, making it an ideal solution for producing pharmaceutical labels efficiently."

Thankfully, there are many ways to implement cost-saving alternatives without hurting labeling quality.

Some label manufacturers have changed their own supplies in attempts to pass cost savings on to customers. Des Laffan, general manager of Pharmalabel (Greensboro, NC), a member of the RxPerts Printing Alliance, notes that his company has gone to a lighter-weight paper as paper prices increased. "It's now more of a European consistency and weight, but it performs just as well," he says.

Tom Moore, president of Pharmaceutic Litho & Label Co. (Chatsworth, CA), has looked for similar ways to pass cost savings along, noting that because "cost is never a secondary consideration, we have to look for different sources of paper. It's up to the customer to qualify that paper, but we must do our part with the research."

Another way to attain efficiencies is to standardize processes wherever possible. "We standardize the types of folds as much as possible," PCI's Gordon says. "We also like to standardize other packaging supplies we use and order them in large quantities."

SERVICE AND EFFICIENCY

Cost savings can also be gained on the service side of things. Walt Kirchofer, president of Altwood Roll Label Company, Inc. (Elmwood Park, NJ), notes that a popular method is for the pharmaceutical company to have the supplier sign a Certificate of Compliance, which essentially shifts much of the quality checks to the vendor.

Shifting QC responsibilities from the customer to the vendor reduces labor costs and related expenses for the drug company but increases paperwork for the vendor, so all parties involved need to understand the full impact of such an arrangement. "We spend a fortune documenting everything we do," says Lance Vanden Brook, sales and marketing manager of New Jersey Packaging (Fairfield, NJ), a division of Menasha Corp. "We have to educate our customers about the cost associated with all the documentation."

"You have to support the product with value-added services that may not always be product related," says Ernest Chaplin, vice president of sales, marketing and product licensing for Pharmagraphics (Greensboro, NC). "That may be electronic data interchange or e-commerce."

Indeed, Vanden Brook says, another development that will help efficiencies is the emergence of software systems that integrate the drug company's ordering system with the label supplier's operations. "This will allow our customers to go on the Internet, place their orders on our system, and look at the status of their orders," he says. "If they chose to link systems, we would be able to see their forecasts, which would help us reduce cycle times and inventory."

REGULATORY IMPACT

The new OTC labeling regulations, which require a larger type size and mandate how labeling information must be organized, is another wrinkle in the quality/cost equation. The regulation is forcing labels—and in some cases, packages—to be redesigned, which can be expensive and requires vigilance.

Even though FDA postponed implementation of the new rule for a year, if drug companies wait until the last minute, suppliers may already be stretched too thin on other projects and might not be able to give the project what it demands.

"We're encouraging early adoption, well before the final April 2002 deadline," says Chris Schaefer, director of marketing at CCL Label Inc. (Rosemont, IL), which makes an expanded content label as well as a multiple-level design called Spinformation. "Our recommendations include planning any investments this year for 2001 budgets so that necessary transitions can be made early in 2001. Marketers waiting to adopt will likely experience capacity challenges in the industry as early as June 2001."

A number of solutions have been emerging, some of which seem to have the potential to be cost-effective.

"We are going away from the multiple-ply, multiple-panel constructions," Laffan of Pharmalabel says. "We are printing content on the back of the label, so you peel the label up to see it. We apply spot adhesive deadener to the back of the label to lift it on and off."

Reveal Estate, offered by Label Express (Midvale, UT), is a proprietary design that allows manufacturers of pharmaceuticals to expand their labeling space by at least 66%, without requiring additional label panels or new application equipment. "The design offers a high degree of memory, so it springs back into place," says Lars Ho-Tseung, president of the Impaxx Labels and Packaging Network, of which Label Express is a member.

Reveal Estate from Label Express is offered in a destructible version that will cleanly tear should someone try to tamper with the label.

Another option is to change labeling graphically instead of mechanically. "We're focusing on making graphic changes to existing packages without changing the structure of the packaging design," says Tom Grinnan, director of marketing and strategy, Mebane Packaging of Westvaco (Mebane, NC). "However, very small packages require a different level of expertise, so we have come up with new designs that not only meet the labeling requirements but add more space for marketing. We have created five structures purely out of paperboard."

The new designs that require the label to be peeled and resealed have created extensive demands on the adhesives to perform over time, notes Jeff Robinson, market development leader for packaging at FLEXcon Co. (Spencer, MA). "We sell an adhesive that we're familiar with, but a lot of converters alter it for these applications, like by deadening it on some areas of the label, so there is a lot of study going on about the long-term effects," he says. "We are doing test protocols to simulate the age of a label to test the effect of the altered adhesive. It's opening up a whole new area of expertise."

COVERING ALL THE BASES

In addition to looking to their quality, regulatory, and purchasing departments when making labeling decisions, packaging engineers should probably try to involve the legal team as well. Pharmaceutical companies can't afford to ignore the legal aspects of the process, lest they get involved in costly litigation. For instance, in March, Inprint sued Merck Sharpe & Dohme (MSD) in The Netherlands, claiming that Inprint worked with MSD to develop the Extended Text label for the anti-AIDS drug Crixivan, and then after a year the drug company replaced Inprint with another supplier to manufacture the same design. Inprint objected not only on intellectual property grounds, but also on quality grounds, George says. "To say 'copy this for a lower price' is a dangerous process for a company to pursue because you can't guarantee that the manufacturer will comply," he says. "However, active resolution is being pursued by all parties."

There are ways to balance cost, quality, legal concerns, and regulatory affairs in labeling without giving anyone the short shrift. But without constant communication between drug companies and label suppliers, the balance will probably not be met. Cost may seem like it is the overriding factor right now, but that could change if both sides interact with each other responsibly.

"Cost is a major factor, but it is not the only factor," Chaplin of Pharmagraphics says. "We think that in the long run our customer base expects to have suppliers who are creative and who produce quality, and that people will still have an appreciation for that."

Andrew Wick, pharmaceutical business manager for Jonergin (Montreal), agrees. "A recall affects the company name, so the focus has to be on nothing but QA and detailed customer information."