Balancing risk with costs

As pharma companies demand more complex packaging solutions, are they prepared to bear higher costs? Or is there a middle path? Sachin Jagdale analyses

The pharmaceutical industry is becoming more regulated by the day as regulators try to find more ways of reducing medication costs, delivering safer medicines and making pharma companies more accountable. Pharma companies therefore are scrutinising every part of their business to reduce risk. Production processes are therefore being viewed from a regulator's point of view and one of the most effective means of protecting pharma products is to review and strengthen the packaging systems. After all, it is the packaging of a product which ensures that it reaches the user/patient with the same potency as it left the factory premises. Pharma companies are therefore empowering their packaging departments to think about innovation and new technology. However, quality and cost always go hand in hand. Keeping check a on cost has always been an uphill task for pharma packaging manufacturers.

Putting packaging concerns on the list of priorities is a new experience for most pharma companies. Aditi Kare Panandikar, Director Business Development and HRD, Indoco Remedies, explains, "Packaging in the pharma industry is often seen as a means to an end, with the focus rightly being on the therapeutic values of the product itself. However in recent years, legislation has greatly impacted the pharma packaging industry in a number of ways, whether it is in the performance (in the case of child resistance or tamper evidence) or in the graphics (in the case of information, warnings, font sizes and more recently Braille). This trend looks set to continue."

The supplier side of the industry is fully aware of the regualtory environment in which their pharma clients operate and compete. Rajesh Subramaniam, Chief Executive Officer, Vectacraft Machineries echoes, Panandikar's views when he says, "It has to be understood by all that technology costs money. And when we, as manufacturers, invest so much in R&D, pharma firms should be equally accommodating in accepting that high-priced technology makes packaging more robust and consistent."

Making the right choices

"It has to be understood by all that technology costs money. And when we, as manufacturers, invest so much in R&D, pharma firms should be equally accommodating in accepting that high-priced technology makes packaging more robust and consistent" - Rajesh Subramaniam Chief Executive Officer Vectacraft Machineries

"Cases of huge human loss like the risk of children ingesting dangerous medicines , counterfeiting drugs has resulted in stringent FDA legislations which in turn puts pressure on pharmaceutical manufacturers and consequently packaging suppliers" - Aditi Kare Panandikar Director Business Development & HRD Indoco Remedies

Having agreed on this, what can be done to reduce the pain points between pharma clients and packaging suppliers? K Eswara Krishnan, Chief Operating Officer, Parle Global Technologies, finds proper prior interaction between the two sides very important as it increases the level of accuracy of the service. He opines, "It is important to convey the characteristics of the product to the packaging specialist who can work together in deciding the need for the product. It is essential to carry out tests before launching the same in the market." For example, choice of lidding film is very crucial if the product is hygroscopic. Eswara Krishnan says, "It is generally known the best packing for a hygroscopic product is Alu/Alu laminate. While you use the base foil as alu/alu laminate you should take care of the lidding film as well, as the film may have pinholes and the safety of the product is lost. A lidding film of higher thickness may not have pinholes but increases the cost of packaging. Thus specifications are to be laid down before deciding the material of packaging, film thickness, its properties etc which need to be decided based on the product."

Balancing cost with safety

Any new innovation in technology demands extra spending. It will be the acid test for pharma packaging solution providers to balance growing packaging needs with their optimum level/capacity of investments to manufacture those products.

Calculating cost of a pharma product is a slightly tricky business. "Cost, as we see it is due to rejections and return of consignment due to defects. The total calculation is based on the internal spending on producing the product. One should be transparent while discussing with the technical person suggesting automation so that the return on investment (ROI) calculations can be nearly correct. It is not correct to take just the cost of operator replaced with the automation process and it is much more like managing the operator, his knowledge level in doing his job and his consistency in achieving the same every time from start to end of a shift and every day," says Eswara Krishnan.

Panandikar cites advances like child resistant seals, senior citizen friendly features, addition of Braille, the use of Radio Frequency Indentification (RFID) Tags and anti-counterfieting features as the reasons behind the cost of packaging material and also huge investment at the supplier end.

Considering the fact that service providers need to put in extra investment to avoid risks, Panandikar justifies the cost of the end product saying, "Cases of huge human loss like the risk of children ingesting dangerous items, counterfeiting drugs has resulted in stringent FDA legislations which inturn puts pressure on pharmaceutical manufacturers and consequently packaging suppliers. So if you analyse the issue in this perspective additional investment by the supplier seems justifiable."

As Subramaniampoints out, Though the initial cost is high, it is one-time. But the consistency in the package, the savings and the sound sleep thereafter is the recurring benefit."

'Just In Time' packaging

A new trend catching on in the industry is the concept of on-demand packaging and labelling. Panandikar says, "On-demand packaging as the term suggests is meant to provide packaging material in a speedier manner as well as in quantities as desired by pharma manufacturers from time to time. It is being used particularly for products used for clinical trials."

On-demand packaging scores over traditional packaging as it offers pharma clients, especially those with products on clinical studies, greater flexibility to change their packaging requirements and shorter turnaround times. This avoids significant delays and keeps costs at a reasonable level. Like raditional packaging and labelling, on-demand packaging also follows Good Manufacturing Practices (GMPs) and approved pre and post production batch records.

Eswara Krishnan too recommends on-demand packaging, as these kind of packaging solutions are the best for any packing needs. All that is needed is the User Requirement Specification (URS) clearly spelling out complete details as what is the purpose and the need in packaging. The machine builder will follow the URS and draft a design qualification in order to meet the need specified in the URS. Once this is approved, the machine is constructed which will be a customised solution. The system will be made available just in time and the need is serviced.

Pharma professional are quick to cite the importance of on demand packaging. As Panandikar comments, "This innovative method increases flexibility, saves money, and supports the critical path initiative with respect to medicinal clinical trials."

Ravindra Wagh, General Manager (Formulations), Intas Biopharmaceuticals, suggests that on demand packaging is a very useful packing concept. Rather than calling it on-demand, if we consider it as an online packaging concept, it will become more risk free. He adds that another use of this kind of packaging is in reducing various mistakes that would happen during the packaging process. "This will involve formation of a packing component, its printing, its over printing and packing of a given product online. This certainly will reduce the risk of wrong labeling, wrong packing, packing with wrong instructions, mix ups, shade variations etc. Even if a simple bar code will get added batch wise, it will lead to great safety from all above points thereby reducing the risk during packing to nil," adds Wagh.

Amidst the debate over the role of on-demand packaging in reducing costs, Subramaniam feels that it is a relatively new concept in India, and might augur well, with the changing global economics, but only on a certain scale.

Symbiotic relationship

Keeping informed about each other's needs will always reap benefits in the form of good productivity, safety and cost saving, not only for the business partners but also to their customers. As Eswara Krishnan rightly says, "It is important that the solution provider is not (merely) a business manearning profits but gives a good solution to the pharma industry for the need of healthcare. Thus they are one family related to each other. Of course, the job is business for both of them."

As pharma companies add new products to their kitty with brand expansions, and product acquisition, packaging solution providers opt for cost effective ways to increase their capacity. The solution lies in providing versatility in machinery, flexibility and quick changeover.

According to Wagh for a symbiotic relationship, the service provider needs to give proper quality and the pharma companies need to make proper payments. Panandikar says, "In recent years, pharma companies have been facing margin pressures due to intense competition, higher cost of` product approvals, rising costs on research and development (R&D) and threat from generic drugs. This led them to outsource their services so as to concentrate on their core operational activities like R&D."

She adds, "If we understand the present scenario, a pharma packaging solutions provider's role is of critical importance and it can be considered as a partner in increasing efficiency and competitiveness of pharma company."

It is always said that first impression is the last impression and pharma packaging industry is playing this role of impressing the customer with its innovative packaging, quite remarkably. However, to provide risk free packaging solutions is also yet another crucial service expected from the packaging solution providers.

So in the quest to ensure safety of the end product, if packaging solution providers have to increase the cost, then it is sometimes justifiable. At the end of the day health will always get the priority over the cost to maintain it.

sachin.jagdale@expressindia.com