PA CKAGI NG I N TELLIGENCE BRI EF
Pharmaceuticals &
Nutraceuticals
Making Packaging Meet the Challenges
MAY 21, 2008
About the Packaging
Intelligence Brief Series
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PMMI is proud to present this Packaging Intelligence Brief.
PMMI Packaging Intelligence Briefs address trends and
topics that are significantly impacting packaging and
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to market needs.
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Pharmaceuticals & Nutraceuticals
Making Packaging Meet the Challenges
As a highly regulated industry in the United States, the
The report is based upon research conducted by telephone
pharmaceutical market presents both packagers and
interviews in mid-2007 with 71 purchasing authorities at
machinery vendors with unique hurdles, such as new drug
pharmaceutical and nutraceutical companies. Among them
delivery systems. But even concerns that are shared with
were representatives of six of the top 10 industry-leading
other market segments, such as counterfeiting, are
firms. Slightly more than half of the survey participants
magnified for pharmaceutical companies by the more
work for a pharmaceutical/nutraceutical company; the
serious
PMMI’s
remainder comprises medical device manufacturers, con-
Pharmaceutical/Nutraceutical Packaging Machinery report
tract manufacturers/packagers, OEM companies and
provides a close-up snapshot of how these challenges and
industry experts.
outcomes
of
such
threats.
opportunities affect the design, manufacture, and
marketing of pharmaceutical packaging machinery.
PHARMACEUTICALS & NUTRACEUTICALS
1
P A C K A G I N G
I N T E L L I G E N C E
B R I E F
The Current State
for an individual machine or the vendor itself, are far more
When asked what packaging machinery currently is in use
complex. The number one reason for acquiring a new
in their plants, an overwhelming majority of respondents
machine is increased output, the survey finds. This criteri-
identified marking equipment — not surprising in light of
on is followed by increased automation or technology,
the universal need for bar coding and other data printing.
greater operational efficiency, package/material cost sav-
Also ranking quite high were labeling equipment, case
ings, changeover flexibility, new product launches, and
packing/sealing and conveying/feeding machines. A pur-
reduced labor. Other reasons are mentioned but received
chase intent query resulted in nearly parallel responses,
few votes.
Most important considerations when selecting a machine/manufacturer
Total
Selecting a vendor is a critical
Cost of machine purchase
33
decision, considered as impor-
Aftermarket support
31
tant as choosing the right
Company reputation
20
Service location & parts availability
14
Ease of maintenance
13
fact, pharmaceutical buying
Flexibility of change-over
13
authorities
Machine quality
12
important criterion, after the cost
Reliability
12
Operational equipment efficiency
11
Production output
9
ability to provide aftermarket
Machine customization
8
support. The OEM’s reputation in
Cost counts, but so does aftermarket support, according to participants in PMMI’s
“Pharmaceutical/Nutraceutical Packaging Machinery” study. The considerations are listed here
according to how frequently respondents mentioned them. One note: Machine customization ranked
more important for pharmaceutical companies and nutraceutical firms found the cost of the machine
to be more critical.
machine for the application. In
say
the
most
of the machine, is the vendor’s
the market, especially as it
relates to the quality and
reliability of the machinery it
builds, is also a factor.
but inspection/detection equipment and optical sensing
devices also ranked fairly high on future purchase lists.
The Importance of Relationships
When purchasing new machinery, most of the pharmaceu-
As to where these survey participants source their packag-
tical companies in the survey say they prefer working
ing machinery, 44 percent said U.S. manufacturers only,
directly with an OEM over a systems integrator.
28 percent said offshore and another 28 percent said both.
Accordingly, about 60 percent of equipment is purchased
directly from an OEM. Some companies work with the
Not all packaging machinery decisions involve U.S. vs. off-
OEM’s in-house integration team. The reasons for the
shore suppliers, however. The determining criteria, either
preference include price, aftermarket support and
2
MAKING PACKAGING MEET THE CHALLENGES
technical expertise. The OEMs are also described as
the U.S. will remain the dominant country of origin for FDA-
easier to work with.
approved production facilities.
However, survey respondents say they are more likely to
But, citing cheaper labor and operating costs, tax incen-
seek the services of a systems integrator when installing a
tives and fewer emission regulations among their reasons,
full line, as opposed to single pieces of machinery. Also, an
about one-third of the participating companies say they will
integrator can be employed to achieve validation on the
continue to move at least some production offshore.
line. If specialty control systems will be required, a systems
Respondents also point out that production of generic
integrator is likely to be called.
drugs, which are no longer patented, is more likely to move
offshore. The FDA will continue to inspect any drugs
The pharmaceutical/nutraceutical companies are no
imported into the U.S. In the long run, it seems that by
strangers to contract manufacturers/packagers. Almost
maintaining and operating facilities in more than one coun-
everyone surveyed agrees the use of contract services will
try, pharmaceutical companies encounter additional hur-
continue to increase. Reasons given are cost savings,
dles — such as complying with the regulations of each
increased flexibility, smaller batch runs, better technology
country. Several participants speculate the U.S. may soon
at the contract packager’s plant and reduced need for in-
impose a “user fee” for inspecting imports, similar to the
house dedicated lines. Only 4 percent of the research par-
inspection fees in Europe, set on a per diem basis.
ticipants say the use of contract packagers is decreasing.
Equipment Verification —
Cost savings can be achieved in a number of ways, but one
System Validation
reason stands out as unique to pharmaceutical producers:
small runs for drug samples and for drug trials. Contract
Verification activities play vital roles at various stages of any
packagers also can help by handling the overflow of sea-
packaging equipment’s life cycle. Not only do they fulfill the
sonal capacity increases; they can also help a pharmaceu-
basic contractual obligation of providing a ready-to-deploy
tical company to get a new product to market faster.
product, but they also provide an opportunity for the OEM
to support the customer’s efforts at overall system valida-
Location, Location, Location
tion compliance.
Because of U.S. Food & Drug Administration (FDA) validation requirements, compliance regulations and the ever-
Manufacturers of pharmaceutical and medical products
present fear of counterfeiting, most of the pharmaceutical
need to identify and document any control systems for pur-
companies in the survey will keep the lion’s share of drug
poses of validation. Embedded software in machinery,
production on U.S. soil. Half of the survey respondents say
especially, needs to be scrutinized, tested, verified and
PHARMACEUTICALS & NUTRACEUTICALS
3
P A C K A G I N G
I N T E L L I G E N C E
B R I E F
validation program is potentially
Challenges for the Packaging Machine Builder
Total
compromised. The survey results
Product traceability
20
Online diagnostic software
15
Inspection vision system
13
ments are being driven by the
Receiving control system upgrades from remote locations
13
demand for global real-time pro-
More validation protocols on equipment
6
duction and process standardiza-
Data monitoring
5
Global validation/governing body
4
Better testing for potential defects in units
3
More flexibility/change over
2
Faster download rate/better links to software
2
Data Acquisition —
Open architecture
1
Operations & Compliance
Maintenance integration system
1
More stringent requirements for installation of OQ & PQ
1
On-line quality checks
1
cuss their needs for integrated
Use of track & trace
1
data communications in their
More electronics (servo)
1
packaging machinery in terms of
Ability to print more data on package
1
validation and process standard-
As this chart illustrates, equipment requirements are being driven by the demand for global real-time
production data and process standardization.
show how equipment require-
tion, key aspects with implication
for validation compliance.
Respondents were asked to dis-
ization. While data acquisition is
more integrated today than even
documented. As a result, more and more pharmaceutical
just a few years ago, companies say they are still looking
packagers are demanding OEMs complete software testing
to improve validation reliability. Many survey participants
and validation before the machinery is shipped.
say their customers demand it. Some pharmaceutical companies are implementing ethernet connectivity as new
The verification responsibilities of the machine supplier do
equipment is added. Others are interfacing with
not end with the delivery and acceptance of a working
Supervisory Control and Data Acquisition (SCADA) and
system. As customers clamor for greater flexibility and
Enterprise Resource Planning to improve internal/external
upgrades, the resulting need for re-verification comes to
communications. Systems Applications & Products (SAP) is
the fore.
also now integrated at many companies in a real-time
environment.
Looking to the future, packaging machinery builders will
need to satisfy validation compliance. The OEM aspects of
While much of the data potentially collected in real-time may
a machine’s process must be verified, or the purchaser’s
directly influence the efficient and reliable operation of the
4
MAKING PACKAGING MEET THE CHALLENGES
packaging machinery, data acquisition capabilities imbedded
Perhaps a far more promising future application of RFID,
in the machine make the customer’s regulatory compliance
however, is as a deterrent to counterfeiting. Already used
easier. Product traceability, online maintenance and vision
by the large pharmaceutical companies for logistics, prod-
inspection are also cited as benefits of real-time data.
uct identification and date coding, as mandated by WalMart, RFID is clearly the future technology of choice for
Flexible vs. Rigid
fighting the war on counterfeit drugs, according to the sur-
The general trend in packaging toward flexible materials is
vey. Far more than just a drain on corporate profits, coun-
not as prevalent in pharmaceuticals, for several reasons.
terfeit medications pose a serious — even deadly —
Flexible packaging offers a decrease in weight and materi-
threat to the American population.
al usage, but it does not easily provide the child-resistance
and drug delivery options of rigid packaging. Blister packs
Three-fourths of the surveyed companies indicate they
(defined as rigid) are becoming increasingly popular in the
currently use RFID for anti-counterfeiting or will use it in the
pharmaceutical market because of customer convenience
near future. Of those now implementing RFID, nearly half
and their ability to improve patient dosing compliance.
say they will increase its use.
Further, some drugs, such as those that must be dosed in
syringes, do not lend themselves well to a flexible option.
But RFID is by no means the only practice in use to protect
products today — bar coding is far more prevalent. Also in
More than half of the survey participants state that their
use are holograms, color-shifting inks, covert markings and
companies are changing the physical form of their prod-
non-contact inspection methods, such as x-ray and
ucts or altering the packaging. Inhalants and soft gel caps
weight-checking.
are overtaking tablets in some cases. Also increasing in
usage are needleless injectables, oral strips (melt in the
Sustainability Initiatives
mouth) and unit dose packs, especially as physician and
No discussion of pharmaceutical packaging would be com-
veterinarian samples. Such changes are prompted by con-
plete without addressing sustainability. Almost half of the
sumer convenience, accommodating more mobile lifestyles
respondents say they believe there are real cost advan-
and facilitating dosing compliance.
tages to sustainable practices. Another 15 percent agree,
but temper that sentiment by advising caution at the outset
RFID to the Rescue?
of any initiative. Nearly three-quarters of the people
A couple of people interviewed consider radio frequency
interviewed for the survey are now making business
identification (RFID) a future method of improving patient
decisions based upon both corporate and social responsi-
compliance.
bilities, and trying to achieve a balance between the two.
PHARMACEUTICALS & NUTRACEUTICALS
5
P A C K A G I N G
I N T E L L I G E N C E
Anti-Counterfeiting Measures in Use
B R I E F
Number of
Companies
Using Currently
Number of
Companies Planning
to Use in the Future
RFID
32
46
Holograms
21
22
Bar-code checks to match packaging
components with machinery parameters
59
57
Color-shifting inks
25
27
Covert markings
21
22
Non-contact inspection tech
29
25
As seen on the chart, many companies already have anti-counterfeiting practices in place, trending
toward RFID and a slight increase in the use of holograms, color shifting and covert marking.
Package designers, in particular, say they are challenged
Copies of the “Pharmaceutical/Nutraceutical Packaging
by the multiple facets of going green. Survey respondents
Machinery, Industry Segment Market Research Study” can
point out that pharmaceutical/nutraceutical companies
be purchased from PMMI’s Business Intelligence
must balance becoming more sustainable with adhering to
Department. The cost is $2,500.00. To order, contact
regulations and patient safety initiatives. Furthermore, each
Paula Feldman, director of research and surveys:
change to packaging materials requires new validation
703.243.8555, 703. 243.8556 (fax) or paula@pmmi.org
trials, which are time-consuming and costly.
Participants rank their primary sustainability initiative as
“going green” in the broad scope of business. Also
mentioned are recycling more, reducing the weight and
materials of the package, reducing corrugated use,
minimizing carbon emissions and reducing overall waste.
The supply chain is another area where companies are
hoping to reduce fuel consumption and carbon emissions.
6
MAKING PACKAGING MEET THE CHALLENGES
About PMMI
PMMI is a trade association with more than 550 member companies that manufacture packaging and
packaging-related converting machinery, commercially-available packaging machinery components,
containers and materials in the United States and Canada. PMMI aggressively develops creative and innovative programs for its members and the industries they serve. Its vision is to be the leading global resource
for packaging, and its mission is to improve and promote members' abilities to succeed in a global marketplace.
Learn more about PMMI at pmmi.org.
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