Business Workshop Report 2 
- Boots Healthcare International

BUSINESS WORKSHOP REPORT

MEDICAL PRODUCTS

British Plastics Federation

THE BUSINESS WORKSHOPS

The Business Workshops are supported by the DTI as part of the Partnership in Plastics (PIP) Programme. The Programme is designed to improve the competitiveness of the UK plastics processing industry by building links between major customers and small to medium enterprises (SMEs). The focus of the Business Workshops is on informing the SMEs of the changing needs of major customers and the means of meeting these needs.

A LONG TERM REGULATED MARKET

Medical products packaging is a very special type of packaging. The package creates a brand identity but can also act as the delivery and dosage control system and as a tamper proof security barrier.

The market is heavily regulated throughout the world and all materials and processes must be approved by multiple regulatory authorities before use. The resulting long development times (and high costs) affect the structure and needs of the industry. Despite the high costs, innovative packaging and delivery systems can be used to extend brand penetration and to open up new markets.

The key features of the market are:

• The market is highly regulated in the UK and in all overseas countries. Legislation governs almost every aspect of the process and all devices must be CE Marked to show conformance with the regulations.
• Customers operate at a minimum on a pan-European basis and mainly on a world-wide basis.
• World-wide pressure on healthcare budgets for prescription drugs has caused a general move towards the use of "over the counter" (OTC) drug delivery to the patient.
• Well established products can often generate considerable market growth from the development of innovative packaging, e.g. Nurofen (TM) continues to grow in usage because of new packaging and delivery methods.
• Single sourcing is almost inevitable given the cost of development and legislative constraints.

In this sector, the world-wide “cost of change” (for even a minor change) makes a stable and long term "partnership" a necessity for both the customer and the supplier.

THE PRODUCT NEEDS

Medical products packaging must meet four essential requirements:

• Packaging must be user-friendly: Devices must be visibly tamper proof and easy to operate. The packaging cost is small compared to other costs but has an important effect on sales and consumer acceptance.
• Packaging must be environmentally compliant: This requires a "reduce, reuse, recycle and remove" approach, e.g. the Sweetex (TM) dispenser includes a polystyrene spring to make the complete package recyclable.
• Packaging must be low in weight: This can be achieved by materials substitution and reduction to reduce materials consumption.
• Packaging must differentiate the product from the competition: This will require a exclusivity of design for a substantial period.

It is rarely possible to gain existing business by offering the same product at a lower cost. The “cost of change” makes even a simple substitution very difficult to justify. The development of a unique, innovative and practical pack design is virtually the only way to gain access to market. The need is to add value through technology and innovative design from the supplier.

THE SUPPLIER PARTNER

The model supplier of medical packaging needs to meet specific requirements. These are:

• Customers are in the business of marketing healthcare solutions - not making components. The supplier is responsible for the production of solutions as well as the production of components.
• Innovation is the key to entry and success. This can involve product differentiation or simplification of product assembly.
• Cost effective solutions do not mean “cheap” but mean the least cost for the finished product. Optimisation of the complete system is better than optimisation of sub-systems.
• Customers need long term partners. The high cost of finding replacement partners and the long development times (a minimum of 5 years for project completion) leads to stable relationships and performance based assessment. Consistency and patience are key requirements.
• “Good Manufacturing Practice” is needed at all times. This requires clean machines and facilities (hats etc). Only agreed changes can be made - A small materials component change may cost £1000 per country and when the company is operating in 130 countries the costs rapidly become excessive. Constant materials supply with Certificates of Analysis and both batch and production traceability is an essential control.

In return for meeting the requirements, customers will often provide project management assistance and a firm 2 month delivery schedule based on a 6 month rolling forecast.

TECHNOLOGY ISSUES

The long lead times in package development and approval make it essential that customers are aware of technology trends in a wide variety of areas at an early stage. Technology forecasting for a 5 year period is difficult but necessary for medical packaging projects.

Medical packaging is often at the leading edge but the supplier must provide both the technology and the innovation. Suppliers to be pro-active in the application of new technology and concepts to give joint benefits.

EXAMPLES OF PLASTICS IN HEALTHCARE PACKAGING

• Blister packaging.
• Dosage control packaging for medical and consumer products.
• Pump packs.
• Pharmaceutical and healthcare containers and closures.
• Cosmetics and toiletries containers, closures and caps.
• Pill and medicine dispensers
• Tamper resistant containers
• Closures and caps for a wide variety of containers.

THE KEY LESSONS

• Regulatory requirements drive the market.
• Medical products companies need strong stable suppliers who are prepared to invest for the long term. A "partnership” is essential to achieve regulatory compliance, minimise the “cost of change” and provide the technology of the future.
• The supplier is responsible for producing an innovative solution rather than a product.
• Single sourcing is the rule rather than the exception.
• Innovation is the key to entry to the market.

GROWTH PROSPECTS

The market is expected to grow by 54% from 1998 to 2008. The total market in medical devices is predicted to grow to about $40 billion in 2008. This growth will be mainly generated by packaging innovations in design.

The PiP Programme consists of a range of activities including:

• Business Workshops and Reports
• Plasticity Seminars
• Pentamode Code of Practice

 Note: Any opinions expressed in this Business Workshop Report represent those of the author and not necessarily those of the BPF, DTI or Boots Healthcare International. Produced for the PiP Programme by Tangram Technology Ltd. (info@tangram.co.uk)

For further information about the PiP Programme contact:

The British Plastics Federation
6 Bath Place
Rivington Street
London EC2A 3JE
Tel: 0171 457 5000
Fax: 0171 457 5045

This Business Workshop Report is based on the results of a PiP Business Workshop held in June 1999. The customer viewpoint at the Workshop was presented by Mr. Nigel Theobald of Boots Healthcare International (BHI).

 July 1999