Medical Device Link.

Originally Published PMPN October 2001

STERILIZATION SUPPLEMENT

Packagers, Sterilizers Tout the Benefits of Teamwork

Partnerships between contract packagers and sterilizers make it easier to get products to market.

William Leventon, Contributing Editor

If you are looking outside your company for both packaging and sterilization services, you can hire a packager and a sterilizer. Or you can hire a packager that has partnered with a sterilizer.

What's the difference? In the first case, you'll work directly with both the packager and the sterilizer. In the second case, you'll work with the packager, which in turn arranges the sterilization, manages the operation, and handles all the related paperwork. Such an arrangement is intended to simplify outsourcing for the medical device manufacturer.

Packager and sterilizer partnerships are an outgrowth of the trend toward the outsourcing of functions traditionally handled by manufacturers. "Customers continue to push more responsibilities down to their supply chain," says Gregg Olson, vice president of sales for Horizon Medical Outsourcing, a full-service outsourcing firm in Santa Ana, CA.

In the past, Horizon would return packaged devices to the manufacturer, which would handle the sterilization process itself. Besides shipping products to the sterilization firm, manufacturers would also audit the sterilizer, validate sterilization procedures, send the results to a microbiology lab, and pull all the paperwork together.

Now, though, firms like Horizon can handle these tasks for the manufacturer. "Customers insist that they be spoiled," Olson says. "They want to get one piece of paper from one company that says, 'Everything's good to go.' "

Food Technology Service, which has partnered with Doyen Medipharm to offer contract packaging and gamma sterilization services, guarantees 48-hour turnaround for most projects. (Click to enlarge.)

When manufacturers turn sterilization responsibilities over to Doyen Medipharm Inc., a machinery manufacturer and contract packager based in Lakeland, FL, they get one contract and one price for both packaging and sterilization, along with a guaranteed delivery date. Customers then know when their products will be delivered and don't have to worry about all the logistical details involved in meeting the deadline.

When Doyen sends products back to the customer, they're sterilized, packaged, cased, and palletized. "All the customer has to do is send the products to his customers," notes Jim Jones, vice president of sales and marketing for Food Technology Service Inc. (Mulberry, FL), a sterilization firm that partnered with Doyen last May.

HOW IT WORKS

Before products are sterilized, the parties have to determine the proper sterilization method. Some sterilizers specialize in one sterilization method—gamma, ethylene oxide (EtO), electron beam (E-beam), or vaporized hydrogen peroxide (VHP), for instance—while others offer all of them.

After sterilization, products are sometimes returned to the packager for segregation and quality control checks. Some sterilizers can also ship products directly to hospitals or the customer's distribution centers.

Artist's rendering of IBA's accelerator that is capable of providing both electron-beam and x-ray processing.

Since sterilizers do a job that has important regulatory compliance implications, their packaging partners take a variety of steps to ensure that they're qualified. Some packagers ask sterilizers to fill out surveys. Others partner with sterilization firms used by large medical device companies, assuming that such companies would use only highly qualified sterilizers.

Still other packaging firms conduct audits of sterilization firms. "We have a lot of relationships in our supply chain," Olson says. "But the relationships with our sterilizers are far and away the most critical. So we audit them routinely."

On a quarterly basis, Horizon performs between 12 and 20 dose audits of its sterilization processes for its customers. Olson says that these audits are routine regulatory requirements, which manufacturers would have to perform themselves if they were dealing directly with sterilizers. By accepting the results of the packager's audits, manufacturers also save the cost of doing the job themselves, notes Dan Carestio, director of sales and marketing for Isomedix, a division of Steris Corp., a global provider of sterilization products and services in Mentor, OH.

PARTNERSHIP PLUSES

With less sterilization work to do, medical device companies may be able to reduce internal headcount. "If manufacturers want to deal directly with a sterilizer, they need a regulatory person who can handle ongoing sterility issues," explains Jim Reimers, vice president of sales and marketing for Medical Device Manufacturing & Ventures Inc., a contractor in Brea, CA. "And you're not talking about a low-end person. You're talking about a professional who earns a good salary every month.

A Cobalt-60 source rack underwater in a gamma sterilization processing chamber. Photo courtesy of IBA Medical Sterilization & Analytical Labs.

"But when companies work with us, we handle everything. When we send products back to manufacturers, they're certified to meet their requirements. There are no sterility issues to deal with. So they don't need an in-house regulatory person."

More and more medical device companies are farming out these and other tasks required to get products to market. "I work with three or four cyber-companies with no facilities at all," says Ed Joehnk, president of Nutek Corp., a sterilization firm in Hayward, CA. "They farm out everything." These medical startups couldn't exist without contractors that provide sterilization, packaging, and other services.

Even larger companies benefit by outsourcing tasks that other companies can perform better. These companies get more "bang for their buck" by focusing their in-house efforts on product development, sales, and marketing, says Ray Johnson, president of Doyen Medipharm.

Some outsourcing arrangements are more efficient than others. For example, Johnson says, companies that have separate relationships with a packager and sterilizer are forced to handle a host of logistical details that are better left to the packager.

To save time, Doyen's packaging cycles are scheduled so that products shipped to Food Technology's facility are sterilized soon after arrival. "We've got a reserved space, and we gear our production to that reservation time," Johnson explains. By contrast, products from another company might sit for days until the sterilizer can get to them.

Small product batches are normally low on a sterilizer's priority list. "That's something that has frustrated small manufacturers," Jones says. "It can sometimes take them a week to get their devices sterilized. But in our arrangement with Doyen, we're guaranteeing 48-hour turnaround time for most of our medical sterilization."

Small manufacturers get faster service in these situations because the packager bundles many small product loads to produce high volume for the sterilizer. Bundling should also reduce sterilization costs for each manufacturer in the group, according to Carestio.

LOSING CONTROL

All in all, manufacturers can gain much by letting packagers handle sterilization. But they can lose something important as well—control over the process. "You're putting blind faith in your contract packager" to satisfactorily manage the sterilization process, Johnson notes. As a result, he says, "you could find out that [the process] is out of control—that you missed your deadline or something wasn't done right—when it's too late."

Boxes containing disposable medical products are loaded into totes before being conveyed to the Cobalt-60 sterilization source. Photo courtesy of IBA.

In most cases, the manufacturer has no control over the packager's sterilization partner. "You can't dictate to the packager what sterilization firm to use," says Pat Hughes, director of sales for IBA Medical Sterilization & Analytical Labs, a Chicago-based sterilization firm. "If you do that, you'll lose the bulk sterilization rate the packager gets."

According to Hughes, contract packagers might push customers to use their partner's sterilization method—whether or not it's the best one for a particular product. If you're not satisfied with your packager's sterilization arrangements, you might be better off dealing directly with a sterilizer you choose yourself.

When it comes to sterilization methods, "we're technology neutral," Hughes says. "It doesn't matter to us whether you want gamma, EtO, or E-beam sterilization. We do it all. And we'll do what's best for the product and packaging, without trying to push you toward one [sterilization] technology or another."

Carestio points out that in situations in which Steris will distribute large amounts of products after sterilization, "there would not be any value in a partnership between us and [the contract packager]. They might do the packaging, but there's not going to be any significant communication between us. And in all likelihood, the customer will pay us directly for our services."

VHP sterilization is an alternative method that can give customers more control over their sterilization process, says Larry Lachowski, sales and marketing manager, VHP, for Steris. The low-temperature sterilization process offers very fast cycle times, rapid turnaround, and no toxic residuals, and it is economical, he says. "VHP can be set up easily in-house to support a JIT manufacturing and packaging strategy, for either small or large lots. The other sterilization alternative is to contract out VHP through a contract manufacturer or with Isomedix."

NEW COMBINATIONS

In the near future, contractors will be offering new combinations of sterilization and packaging services. Doyen Medipharm plans to set up micropackaging facilities in a number of locations around the country. These small facilities, consisting of a couple of packaging machines and modular clean and dry rooms, will be located near sterilization firms in parts of the country where the company has a large number of customers.

Soon, sterilizers may also be moving closer to their packaging partners. Olson expects sterilizers to set up and manage operations at the sites of companies like Horizon. The arrangement would eliminate freight time and reduce the cost of contract services. But at this point, Olson adds, those advantages don't justify the related capital expenditures.

Medical products are loaded into an EtO sterilization chamber for processing. Photo courtesy of IBA Medical Sterilization & Analytical Labs.

As an alternative, contractor packagers could buy their own sterilization equipment. At some point, Reimers' company may purchase machines that perform hydrogen peroxide gas plasma sterilization. "We're not looking at it as a profit center in and of itself," Reimers explains. "We're looking at it as a way to assist start-up companies with very small volumes that need rapid turnaround for products like implants. If we could package and sterilize those products, we could turn them around in a day."

The system Reimers envisions could not be used for high-volume sterilization. Thus, he believes his company will always contract out a great deal of sterilization work. But soon, that may not be the case for all contractors. According to Reimers, some large companies are trying to create true one-stop shops that can provide every type of service a manufacturer would need in order to get a product to the marketplace.

"They're buying up all the pieces so they can offer the whole pie," Reimers says. "You'll go to a company like this with a design and it'll come out as a finished device all ready to go to market."

WHAT TO DO

If you outsource to a packager that handles sterilization, you won't be doing the work—but you can still get the blame. "The sterility of the product is still the responsibility of the manufacturer," Hughes says. "If something goes wrong, you don't get to throw your hands up in the air and say, 'Hey, it wasn't my fault.' "

To minimize problems, a 10-year outsourcing veteran suggests that manufacturers check out potential partners. "Some companies might be comfortable just knowing that the sterilizer is an approved supplier for the contract packager," says Jay Strandberg, supply chain manager for Sequenom Inc. (San Diego). "But based on my experience, I would never feel comfortable with that."

Strandberg recommends sending quality control teams into both the packaging and sterilization facilities before products are sent to either one. Manufacturers should settle for nothing less—even if the packager has every required certification. "The packager could show me a lot of certifications even if [the work] is done in a garage. So I still want to see the facility."

Strandberg also advises manufacturers to look for a packager with few sterilization partners. "The packager should form relationships with the sterilizers he works with so he's familiar with their processes and knows what to expect. If he has five different partners, he's not going to be very familiar with any of them." Ideally, Strandberg says, a packager will have a single main sterilization partner and a single backup that could be used when demand spikes or the main sterilizer is unavailable.

When looking for outsourcing partners, it may be a plus if manufacturers find a pair that are fairly close to each other. By minimizing the distance between the two, you'll save time and reduce shipping costs, Johnson says.

Once you sign up with a contractor, some in the industry recommend that you involve your new partners very early in the process. "Let the sterilization company in the door during product development, during packaging development, during carton development," Hughes says. If you do, the contractors could suggest changes that result in better products that get to market faster. "Your engineers might not think of some things that we would, because we've been in this business for 30 years."

The more contract partners know about the product, the better the process will go. "There's no such thing as too much information," Jones explains. "Share as much information as possible."

That goes for the contractors as well. To improve the flow of information to the manufacturer, Doyen may soon be posting the status of projects on the Internet. Updated daily, these on-line status reports would be available to customers whenever they want them and wherever they might be.

Helpful as this might be, the Internet is no substitute for a close working relationship with your contract partners. "You should make sure that your contract packager and sterilizer are extensions of your company," Jones says. "If that kind of relationship exists, everybody benefits."

Copyright ©2001 Pharmaceutical & Medical Packaging News