Originally Published PMPN August 2002
EDITORIAL
Make Material Substitution Strategies Work for You
In this day and age of global competition, "materials substitution" seems to be a big buzzword among the plastics companies.
That is, their global business strategies not only call for finding new applications for new materials, but also for providing better materials for existing applications. On a global, multiindustry basis, this makes perfect sense, as the materials substitution strategy, if pulled off, can increase market share without incurring the tremendous research and development costs that can come with the new materials–new applications approach.
A few months ago at a press event, Eastman Chemical Co. explained how this has become a part of its strategy. "We see opportunities to expand the pie, but we are also carrying out substitution strategies and seem to be riding a wave of them," said Phillip Griswold, vice president and general manager of Eastman's specialty plastics business.
Brian Ferguson, Eastman's chairman and CEO, adds "it's rare that we create new-to-the-world molecules, but more common that we employ displacement strategies. Headwind businesses tend to be government-driven. We prefer tailwinds to headwinds. When you're not in a market, and then you enter it, there's no penalty for being disruptive."
Some similar words were spoken by DuPont executives when the company convened the press in June as part of its 200th anniversary celebration. Craig Naylor, group vice president for DuPont Performance Materials, identified materials substitution as a key growth strategy for his group, which includes the packaging and industrial polymers business. He said the group hopes to use it to "lower costs, create new functionalities, or create new aesthetics."
The question is, to what extent can this strategy pay off in medical device and pharmaceutical packaging? For a business to make any sort of product change, there has to be some incentive for it. In most industries, firms are free to make changes however they want, whenever they want, whether for cost, performance, or other reasons. But, thanks to FDA, it doesn't work that way in the U.S. healthcare market. Making a change to a package involves proving that the new package is just as safe and protective as the old one. The burden of proof for drug packaging has gotten a bit lighter, thanks to the 1999 guidance "Changes to an Approved NDA or ANDA." But the rules for some products are just as stringent as they ever were.
What this means is that the incentive for change or substitution is not there. The rules are structured so that the incentive often lies in keeping the same package, regardless of any potential advantages of a new material. Even when it makes sense to jump through the hoops involved in changing a package, many firms may choose not to do so, because years of following FDA regulations have made them risk-averse. Often, a new material has a better chance of succeeding in the healthcare market if aimed at new products, on which it can be tested before commercialization.
Eastman and DuPont, though, have been successful at substituting Ecdel and Tyvek, respectively, for PVC and paper in some existing healthcare applications. Their efforts were backed by research, and they were able to show healthcare packagers that the risks of material substitution were worth taking.
So, the next time you hear a supplier mention materials substitution, understand that it may be doing so as part of its global business strategy. Hopefully, the supplier will be armed with research to demonstrate the substitute's benefits. Your job is to put that research to work so that those benefits help your company with its global business strategy.
Erik Swain, Senior Editor
Copyright ©2002 Pharmaceutical & Medical Packaging News
