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Leading European experts from the pharmaceutical packaging industry explain how they are coping with industry trends.
This article is part of a special feature on packaging that was published in the November issue of PTE Digital, available at http://www.pharmtech.com/ptedigital1110.
Q Which geographical markets are stagnating/declining in terms of sales?
Consolini (IMA): The economic crisis of 2009 has deeply affected investment in Europe and the US, but not in the markets of Asia, the Middle East and South America, which are showing good growth prospects. For our company, the percentage of business in the emerging markets is considerable and we foresee it growing in the next few years.
Ludwig (Bosch): We serve both the traditional pharmaceutical markets, such as North America, Europe and Japan, as well as emerging markets, such as the BRIC countries. Currently we do not see a decline/stagnation in any of these; the pharma industry has not been as badly affected by the financial crisis compared with other industries and we see continuing strong investments. In the emerging markets, we've seen strong dynamics and this trend is clearly continuing. Machine requirements in emerging markets are constantly increasing, with regards to automation, performance and flexibility amongst others. Already, these markets contribute strongly to our overall sales and this is set to continue within the coming years.
Peters (Gerhard Schubert): North America is generally considered to be a stagnating market for the pharma industry at the moment. However, it may be that the current healthcare reform will generate new impulses. In emerging countries on the other hand, such as Russia and Turkey, market conditions are showing promise. Once a market shows enough potential we tend to start growing our acquisition force in these markets. Currently, about 5% of our business comes from emerging markets and per annum we estimate that the percentage growth is about 5–10%.
Schäfer (Optima): In general, we've been able to expand our sales even in the difficult years of 2008 and 2009, although the growth rate differs in certain regions. Our traditional markets of Western Europe and the US have grown slower than Asia recently, but it's only in Eastern Europe where we've seen a decline in the past few years — and this represents only a small share of overall sales. In the future, however, we expect further growth in all regions. In particular, we expect to see good growth from the emerging markets. From a mere 5% a few years ago, we can see this number going up to 30% in the next 5 years.
Tomasi (Marchesini): A certain degree of sluggishness has been noticed in countries of Western Europe, which has always represented a reference market for us. This is due to a number of contingent reasons; for example, some countries such as Spain are still heavily affected by the consequences of the economic crisis, while in Germany local companies are safeguarded by a recent policy of protectionism. To fight against this, we focus strongly on innovation and the efficiency of our machines. Additionally, we've responded to the economic climate by offering increasingly advantageous maintenance and service contracts, as well as a wide array of accessory services.
In 2010, roughly 30% of our sales have come from up and coming countries, such as Eastern Europe (14.3%), Latin America (11.5%) and the Far East (4.1%). These markets usually require simpler, but extremely flexible machines as batch and size changeovers are everyday occurrences. These markets also appreciate ruggedness, ergonomics and ease of use over absolute performance. We are very interested in these markets and we expect to grow by roughly 5% over the next 3 years.
Q What are the key hurdles to servicing the emerging markets?
Consolini (IMA): There are no huge differences between regulatory requirements in the emerging markets and those in the West for packaging. The most important requirement to effectively service these markets is the need for a very efficient local structure to be able to promptly respond to market requirements.
Ludwig (Bosch): A major hurdle in emerging markets is overcoming the high initial investment costs compared with the cheap labour costs. This hurdle will decrease with time and the need for automated solutions will continue to increase. Concerning regulatory requirements, standards are constantly increasing, with emerging markets following industry standards, such as FDA regulations.
Peters (Gerhard Schubert): There are many territorial-specific factors in the emerging markets. In particular, however, there is a big difference between primary packaging requirements and secondary packaging requirements. As a general rule, the demand regarding fraudresistant packaging is first seen in the primary packaging sector (e.g., filling of syringes or vials). In the secondary packaging sector (e.g., cardboard packaging, blister etc.) these demands are implemented with a time delay, partly because secondary packaging is often still processed manually. However, the investments for this implementation are also lower.
Schäfer (Optima): Language and local support are paramount to success. Also, a low price strategy is required because most of the companies in these regions are startups and cannot spend a lot on equipment upfront. At the moment, there are still differences in the packaging and regulatory requirements of emerging markets compared with the West; for instance, in emerging markets there are not as many regulations to follow, but this will change. Also, if you want to export the product then you still have to follow the rules at the receiving end.
Tomasi (Marchesini): There are mainly two obstacles to servicing the emerging markets. First and foremost, there is the cultural gap that separates us from these markets, but this can be resolved (at least partially) through onsite agents backed by constant and proficient technical assistance. We have recently opened branches in India and China to cut the physical and cultural gap between these markets. The second obstacle for us is down to production costs, since our production is fulfilled mainly in Italy.
Q How do you overcome the hurdles to expansion in the emerging markets?
Consolini (IMA): To overcome the hurdles to expansion in emerging markets it is very important to have a strong and stable local presence in charge of sales and service in these markets. It is beneficial to have highly skilled people who know the relevant market well and the products that are commercialised within it.
Ludwig (Bosch): The hurdles to expansions in emerging markets can be overcome by strong local sales and service organisation, in cooperation with manufacturing operations. For us, the emerging markets are of highest priority, and we foresee strong future growth potential driven by factors such as wealth, the increase of a strong middle class, better health insurance and increasing living standards. Consequently, we continue to build our local expertise in these markets. This includes production according to market requirements and strong support from our European competence centres for high-end applications. This strategy allows us to understand market requirements, react quickly to changing demands and secure responsiveness.
Peters (Gerhard Schubert): We develop packaging machine concepts with high flexibility specifically focused on these markets in order to package the wide variety of package styles on one and the same machine. The manufacturers in these markets can use the technology platform for different kinds of packaging applications and still only have one base machine investment to make.
Schäfer (Optima): Our strategy is low technology and low price equipment, as well as our own subsidiaries in those countries. It's important to get in front of the customer and speak his language. Having local support and testing facilities also helps.
Q With increasing focus being placed by governments and regulators on improving the security of genuine pharmaceutical products, what measures are you putting in place to help ensure the security of your packaging?
Cardini (Marchesini): The use of tamperevident solutions varies worldwide as there are no standardised regulations. The simplest packaging integrity solution involves using glue sealing, which can be performed directly by the cartoner to speed-up production and reduce potential errors. However, the system is not flawless because all it takes is a heated blade to melt the glue. Another simple solution is to use a tamperevident labeller. This is more reliable because it is difficult to tamper with an adhesive label without damaging the material. The label can also have logos and holograms.
Traceability technologies have also been developed that can help battle counterfeits. These are extremely reliable, especially when combined with a tamperevident system. Track and trace (T&T) systems were first developed 5 or 6 years ago, but are becoming more and more important nowadays in view of regulatory enforcements.
Consolini (IMA): Our customers have asked us to adapt several of our systems to prevent the counterfeiting of pharmaceutical products packaged on our machines. Some of the measures adopted are the use of film for blisters, boxes with hologram images, the printing of bi-dimensional codes and the application of labels with magnetic codes. The two last technologies can also be used for cartons containing blisters and bottles.
Ludwig (Bosch): T&T has been established as a particular growth field in anti-counterfeit solutions. We've been applying T&T systems in production processes for 8 years for controlling and documentation purposes, as well as for product liability reasons. A number of companies have also requested that packaging systems are able to apply 2D matrix codes and mass serialisation, including value stream mapping.
Peters (Gerhard Schubert): Securing the product in the package is typically a joint development between the manufacturer and the machine builder. In order to meet changing market requirements for secure package development, we establish a close collaboration between the supplier of the packaging materials, the machine manufacturer and the manufacturer of the products. Ideally, this approach leads to safe, cost-effective and marketconforming packaging design.
Schäfer (Optima): We are often asked to implement T&T devices in our lines to allow pharma companies to track their products throughout the supply chain, right down to the pharmacist. Implementing these isn't a challenge; it's just a question of what kind of codes have to be detected and how the information needs to be transferred to the IT department.
Q Which anti-counterfeit technologies are showing most promise?
Cardini (Marchesini): There are a number of labelling systems showing promise for fighting counterfeits. The topoftherange models are equipped with vision systems, onboard printer and sensors for detecting rejects and the position of the carton, which can in turn be installed in line with the casepacker. One of the complications of these technologies, however, is the disposal of rejects. If the vision system records a product that is to be rejected, the latter is entered in the database whatever the case and the decommissioning process is consequently triggered, which wastes operator time and slows down production. This problem can be partly solved by fulfilling all the control functions upstream from the chain and by positioning the cameras at the end. The challenge for the future is improving integration between sensors, vision systems and printers, which will also become faster and more efficient.
Another possible solution is serialising and mapping tamper-evident labels; however, this would involve the implementation and management of complex databases. Looking further into the future, we are studying applications of RFID technology, which seem to be rather promising.
Consolini (IMA): The anticounterfeit technology that is showing most promise is 2D data matrix code because it is able to maintain a great deal of information at a lower cost. This technology will be become more and more widespread, especially in markets where pharmaceutical products are largely commercialised.
Ludwig (Bosch): There are many anticounterfeit technologies on the market, but there is no silver bullet; rather an effective solution is to use a combination of different technologies, such as mass serialisation and tamper-evident packaging combined with holograms. Recent government regulations to curtail counterfeits are making these measures ever more crucial for manufacturers. Fortunately, many manufacturers now offer T&T and mass serialisation on a machine level in production lines and at plant level for overall production from a single source.
Peters (Gerhard Schubert): When it comes to anticounterfeit technologies, the easier the better. This means designing a packaging principle that is easy to process in the machine, but complex to remanufacture. If a packaging concept requires specific machine functional principles, for instance, this necessitates higher investments and raises the barrier against plagiarists. In the future, I think widespread adoption of anti-counterfeit technologies is possible, but only if processible safety features for packaging can be achieved.
Schäfer (Optima): There are a few interesting ideas talked about such as RFID, but nobody has decided yet which route will be the main one for pharma. For producers of packaging machinery, the chosen option won't really make much difference as our systems will still have to be able to adapt to all available anti-counterfeit technologies.
Q In general, are pharma packaging companies doing enough to curb the threat of counterfeiting?
Consolini (IMA): Anti-counterfeit technologies are common in many Western countries where there is a culture of safeguarding the origin of the product both for the pharma and the food markets. In some countries, our clients need to implement certain anticounterfeit technologies to ensure they follow packaging rules and regulations. In general, however, I believe that pharma companies could still do more to curb counterfeits.
Ludwig (Bosch): Many pharma companies are now adopting anti-counterfeit measures for their products. Counterfeit APIs and medicines pose a growing threat to patients worldwide, and are becoming increasingly prevalent in Europe and the US. In particular, seizures of counterfeit medicines at European borders have risen explosively in the last 5 years. In addition, more medicines are being sold via the internet, which makes it much easier to put counterfeit products into circulation.
Peters (Gerhard Schubert): A number of efforts have been taken by the pharma industry to ensure the integrity of their products. With regard to the packaging concepts, however, more innovation and progress could be achieved, but the amount of time and effort required to reregister authorised packaging materials is extensive and many companies try to avoid this.
Schäfer (Optima): Companies could do more, but this would incur additional costs in an already competitive marketplace. If it is a voluntary option then many companies choose not to incorporate additional security features.
Tomasi (Marchesini): No, they don't do enough. Many manufacturers, especially smaller ones, consider the implementation of anti-counterfeit technologies as a cost accessory and hold out. Because of this, anti-counterfeit technologies tend to only be used where standards mandate them.
Q What strategies has your company put in place to improve the environmental impact of its packaging processes?
Consolini (IMA): We are constantly testing and trialling plastic films designed to reduce the environmental impact of our packaging processes. The results of these tests and trials have been promising. Also, the machines and complete lines that we design and manufacture have reduced energy consumption.
Ludwig (Bosch): There are a number of ways that environmental issues can be addressed in pharmaceutical technologies. For instance, for pharma equipment with high energy consumption, environmental benefits can be achieved by reducing water and energy usage. Often, modules or transport conveyors of a packaging line continue to run during operator breaks or equipment failures. Energy consumption can be reduced dramatically by having the machine recognise the situation and cease operation to reduce energy consumption. This can be aided by softwarebased assisting systems.
In the sealing process, ultrasonic sealing technology can also help reduce energy consumption by 30% compared with heat seal applications. The seal quality of ultrasonic sealing allows savings of up to 10% in flexible packaging material, and also provides the ability to control the sealing process based on the monitoring of parameters to reduce rejects, waste and rework.
Environmental benefits can also be gained by eliminating complex interfaces between functional modules, which reduces failures leading to rejects of packaging materials. This substantially decreases the waste of packaging material and consumption of energy for the rework.
To really address environmental impact, it is vital to look at the whole production, packaging, distribution and sales processes. A prerequisite for this integrated view is close cooperation between a company's marketing and production departments and packaging systems suppliers.
Peters (Gerhard Schubert): The packaging industries are only just starting to look into environmental savings and these efforts haven't yet been standardised across the industry. At our company, we've focused on using our servo drive technologies to allow recuperated drive energies to be transferred to the electrical power net.
Schäfer (Optima): This question is becoming more and more important. The test runs we have to go through before the line is qualified demand a huge amount of packaging materials to verify all functions. We try to minimise these numbers by using detailed test procedures, without influencing the reliability of the process. In the field of freeze drying, for example, we have put our efforts into energy reduction for each batch run and are constantly working on further reductions.
Our own energy consumption was also reduced recently when we installed concrete core cooling in our last office building. We also switched providers to get 100% renewable energies in some of our facilities.
Tomasi (Marchesini): We attempt to develop solutions that enable manufacturers to work with products that are smaller, such as smaller cartons, to reduce material consumption. We also focus on the technology of the machines so that they can process recycled material. Finally, we aim to strongly reduce machine consumption and optimise energy processes. Proof of this is our new factory that uses geothermic conditioning to reduce the amount of CO2 produced.
Q What key trends in the packaging industry are driving innovation?
Consolini (IMA): There are several key trends driving innovation in the packaging industry. With companies having different needs, a wide range of machine models, from economical to more complex, are required that can cope with any production requirements. Also, users are demanding increased production efficiency, reduction of waste and a manufacturing model that uses scale economy. Finally, the packaging of pharmaceutical products is becoming more and more linked to the real requirements of the final users: patients.
Ludwig (Bosch): Pharma companies are focusing on production costs and methods for efficient production. New equipment has to fulfill high criteria with regards to overall equipment effectiveness. On the other hand, requests for flexible machines with capabilities to run several products on the same equipment need to be fulfilled. The trend to smaller batch sizes can raise production costs as the downtime for cleaning, size changeover and operational work can increase dramatically. We, therefore, focus on these factors and have developed solutions that reduce rejects and reworks and allow easy and quick changeover, as well as faster and easier cleaning.
We're also seeing a move towards robotic equipment, such as delta robots and toploaders for pick and place operations, toploading and cartoning, which not only give much needed flexibility in complex and complete packaging processes, but also act as a link between processes. With their speed and easy operation, robots are ideal tools for increasing efficiency.
With regard to product types, we see the handling of highly potent substances as a key trend. Few suppliers offer fully integrated and comprehensive containment solutions for filling lines so we've improved our capabilities in this area.
A further trend we're seeing is a growing emphasis on childresistant packaging and senior-friendly packaging, which will probably gain more attention in the future. In this area, it is important to provide automated solutions for cost-effective production of new and innovative pack styles.
For the future, we see our task in not only providing equipment, but rather complete systems solutions.
Peters (Gerhard Schubert): We are seeing a clear trend to medium speed and moderate investment costs for secondary packaging machine requirements. In response, we've developed a modular machine concept that allows customised machine concepts to be created, with the option of modifications and retrofits as well as enlargements for future packaging requirements after the delivery of the machine.
Schäfer (Optima): On the product side, biopharmaceutical products are leading to new requirements, such as small lots and filling volumes, which demand different technologies. Another trend is the search for economic, but safe solutions. Different barrier systems, disposable systems that increase flexibility or overall efficiency are some brief answers to these trends. Overall, efficiency starts with a professional project management and ends with perfect interfaces between machinery — mechanically and in the software. Mainly, the trend towards onestopshopping here will lead to better and earlier integration of all components in complex filling and packaging systems, including isolators and freeze drying systems.
Tomasi (Marchesini): Machines of the future shall be less expensive and simpler to use. At our company, we will concentrate strongly on developing increasingly complex robotics and software packages to supervise parameters, which in the past were managed by operators.
Director of the Order Processing Department of Neri (part of the Marchesini Group)
Marketing Director at IMA Safe (Packaging Solutions)
Product Manager for Track & Trace at Bosch Packaging Technology
Sales Manager Pharma, Gerhard Schubert GmbH
Commercial Manager, Optima Group Pharma GmbH
Commercial Director of Marchesini Group