With an ageing population and the growth of emerging economies across the world, the pharmaceutical sector is booming. Research business IMS predicts that the global pharmaceutical industry will reach sales of as much as $1.2tn by 2017 – representing annual growth of 3%-6% and, crucially, a growing market for pharmaceutical packaging suppliers and contract packers.
Yet it is a market that brings particular challenges, and particular opportunities, to those packaging suppliers and packers operating within it, not least the regulatory environment, which is complex and becoming more so. New regulations – notably the EU Falsified Medicines Directive, which requires every individual pack to carry a unique serial number – are posing new challenges to the supply chain both for product and packaging.
It is also a market that turns some of the traditional rules of packaging on its head. In particular, branding and brand awareness – at least in the prescription-only part of the market – are a no-no, since advertising prescription-only medicines is simply not allowed. Functionally, pharma packaging has to strike the fine balance between being easy to open for adults, particularly those with ever-weakening fingers, but difficult to open for children. It’s a market where the old joke about a child being the best person to open a child-proof pack rings true. In the over-the-counter segment of the market, it’s a halfway house between the classic FMCG challenges of shelf appeal and the highly-regulated questions of anti-counterfeit, patient safety and compliance and functionality.
It’s a tough market but one that offers opportunities for those companies that specialise in it. For the second in a series of three roundtable events hosted by Packaging News, in association with Essentra Packaging, we brought together some of the top experts in pharmaceutical packaging to discuss the challenges and opportunities for the sector.
Mass serialisation and FMD
Arguably the biggest challenge facing the pharmaceutical sector as a whole is counterfeiting. The World Health Organisation estimates that up to 15% of all pharmaceuticals on the market in 2011 were fakes.
In the EU, the response is the Falsified Medicines Directive, whose key measure is to require every pharmaceutical pack – rather than every batch from a factory – to be individually marked with a machine-readable code, typically in the form of a 2D data matrix, and a serial number. The idea is to ensure traceability right through the supply chain for every pack coming onto the market.
Graham Clark of contract packer Central Pharma argues that the biggest driver for the FMD is not in fact Europe but the emerging economies, where counterfeiting is more prevalent and where markets for pharmaceutical products are expanding rapidly. “The pressure for this is because we realise there are big profits to be made in places where people habitually counterfeit things,” he says.
But the problem is not simply one of fake drugs; coding technology supplier Domino’s Craig Stobie says that there is a wide range of so-called falsified medicines hitting the market, sometimes with genuine product in counterfeit packs, sometimes fake product in genuine packs, and so on. With pharmaceutical products often being re-packed before going on sale, further challenges to traceability are then posed; leading to, he argues, a potential need for every pill to have its own code, in a “batch of one”.
Yet even that, consultant Chris Waterhouse of Idipac suggests, may not necessarily solve all the problems. “Once you get in the hospital environment, the tablet is stripped out of the box, you’ve lost the code and that’s it. There is a reasonably strong argument, when it comes to repacking, that it’s not the packet that should be coded but in fact every pill, because otherwise you lose the traceability.”
There is agreement, though, that the biggest problem for pharmaceutical companies on any sort of serialisation is not the printing or production but managing the data. Stobie recounts how one pharmaceutical company introduced pack-level serialisation and within six months found it had created the biggest database in the organisation. “Then IT is the limiting factor,” he says.
Chris Penfold of Design Cognition points out that one of the challenges will be how to access the data to check that drugs are not fake. Smartphones are one answer but what if, for instance, you are unable to connect to the internet or to the specific database you needed to access? The answer, says Stobie, is “clever numbers” – codes that do not rely on referring to external data but contain, in themselves, the information required to prove that a product is genuine.
Yet the exact form of how pharmaceutical companies will deal with FMD is still a work in progress. Clark says that while the sector is well aware of the need to act, there is an element of wait-and-see in their approach to dealing with it. “Nobody’s committing yet because the initial solution is often not the solution that you end up with,” he says.
Essentra’s Enrico Folchini suggests another reason for the apparently slow progress from pharmaceutical companies in preparing for the FMD. “The companies want to find something that is a unique solution to the problem,” he says. “They know what they need to do, but they want to find something else that is probably better and will identify them as unique.”
Having a handle on the wealth of regulation not only within a country but across the world in the globalised pharmaceutical market is, undoubtedly, one of the key challenges for any packaging manufacturer or packer looking to make inroads in the sector.
“Making and printing the boxes is the bit that everyone can do. The regulation is the market, it is the industry,” says Central Pharma’s Clark. “Don’t treat it as an adjunct, treat it as the main thing. We hold licenses so we have to know about it. But don’t treat regulation as a hurdle, treat it as an opportunity.”
Of course, regulation is just as important for over-the-counter medicines as it is for prescription-only. Design Cognition’s Penfold gives the example of Nurofen, which has upwards of 160 SKUs worldwide and varies from market to market not only in terms of whether it is sold as an OTC or on prescription, but in terms of regulation for each country. “You’ve got to know each different market – it’s not just broad brushstrokes,” he says.
Of course, there are expert consultants out there who specialise in regulation; and whether packaging suppliers and contract packers have in-house expertise or ready access to external help, it is crucial to have the knowledge close at hand to gain a foothold in pharmaceuticals.
With most primary packaging, its development and design is as much about securing the sale of the product as it is about ensuring safe delivery to the consumer.
But in the pharmaceutical market, the role of ‘silent salesman’ just doesn’t apply to a vast proportion of packaging. “Sales and marketing is anathema to the pharma sector,” says Clark.
This is particularly true for prescription-only drugs, where advertising is banned in most countries and which are often sold in relatively plain and simply-printed cartons, blister packs or other formats with very basic labels. Over-the-counter medicines, which consumers play a greater role in choosing and therefore have more flashy pack designs, are estimated by research business Visiongain to be heading for global sales of around $70bn by 2015. While that is a big market, it is still a small proportion of the overall sector.
The result, according to the panellists, is a sector whose packaging can leave something to be desired; with some reporting variable colour reproduction or just dull design that would not be acceptable in other sectors.
Domino’s Stobie argues that, from the point of view of packaging quality, the pharmaceutical market has “found its level” because of the specific requirements made on it.
“I can find a bottle of mineral water that has better quality of packaging than a £1,000 oncology product in terms of the colours being very consistent, the tamper-evidence, security features and so on – but that’s because the pharma companies don’t want to make it any harder than it is. It’s already hard enough to produce such heavily regulated products,” he says.
Clearly a key driving factor is cost and, Clark points out, an ever-greater focus on spending is being driven by the industry’s biggest client: the public sector. One of the results is that governments are preferring to buy generic medicines rather than branded drugs where they can, for reasons of cost, and this is reflected in the packaging.
“Don’t forget, the pharmaceutical industry is under colossal pressure from governments,” he says. “All the governments are broke and they are the biggest buyers, so they are not going to introduce something that’s terribly expensive if they don’t have to.”
Indeed, both Waterhouse and Folchini recount that one of the indicators of counterfeit packaging can be that the quality is too good – a comment you would be unlikely to hear in other markets.
One of the major challenges for pharmaceutical packaging is around patient compliance and safety. “There are technologies out there that deliver individual patients all the tablets they need for a certain day,” says Design Cognition’s Penfold. “But just because you’ve given them that pack, it doesn’t mean they’ve taken them. Then you’ve got a child resistance issue where if medicines are left lying around, the kids or the dog could get hold of them.”
Patient compliance is a massive issue; a study published in 2012 estimated that in the US market, as much as half of medications are not taken as prescribed and the cost of failing to comply with prescriptions costs between $100bn and $289bn a year in direct and indirect costs.
So how can packaging help? One answer is from the American firm PillPack, which splits up batches of tablets into individual pouches that are organised for specific patients, not by medication but by the time of day they need to be taken. Similar technologies are at work in the NHS; although, Stobie points out, this does raise questions about traceability.
Penfold explains that one way to increase patient compliance is to make on-pack instructions easier. He cites a malaria drug that was launched recently in Africa which used pictorial instructions – a sun and a moon, for instance – to indicate when a pill should be taken without words. He says that the pack was successful because it met the needs of its target audience, many of whom could not read. Domino’s Stobie adds that in Nigeria, patients have been incentivised to take medication correctly by being offered credits for their mobile phones if they do so.
Wilkins points out that one of the major issues for pharmaceutical packaging is around patients’ failing eyesight. In the UK, the Royal National Institute for the Blind estimates that almost two million people currently suffer from sight loss and many more with low vision, including those who wear glasses. “Design frequently doesn’t cater for that reduced vision, particularly with font sizes,” he says.
In the developed world, however, the growing ubiquity of smartphones and other technologies, such as printed electronics, could become part of the solution to such issues.
Stobie points out that the technology already exists for a smartphone to scan a barcode and say what a product is. Penfold adds: “The technology is there already to do all sorts of things – put moving pictures on packs, introduce printed organic electronics, add audible messaging; it’s just still not quite there yet, really from a cost point of view.”
The ageing population is also a major issue for packaging developers and suppliers, particularly with regard to openability of packaging.
Wilkins says: “Between 65 and 75 you lose 50% of your dexterity and manual strength. And the over-65s are scared first of losing access to their medicines, particularly if they have chronic diseases, and they are frightened of looking stupid. They’re keen to be seen to stand on their own two feet.”
Wilkins adds that regulations are being worked on for both elderly-friendly packs and child-resistant packs; while consultations will refine these, they should go some way to helping solve some of the trickier issues around the level of access that pharmaceutical packs should offer to patients and those around them.
The role of design
Peter Aldous of design agency Elmwood argues that one of the biggest challenges for designing healthcare products, especially over-the-counter products such as aspirin or cough medicines where branding and marketing is allowed, is the pay-off between that branding and the mandatory information that needs to go on the pack.
He argues that in other FMCG markets shoppers develop a relationship with brand owners so that they are led from one brand to another in the same family and there is a ‘path to purchase’ that relies on strong packaging. This gives a hierarchy of brands, where, for instance, a shopper might like Procter & Gamble products and therefore buy not only Ariel but also Fairy, Gillette and Lenor. But this tends not to be the case in the healthcare sector.
“You’re putting your life in the hands of a product sometimes, even with OTC products, and you need to develop that trust,” says Aldous. “In pharmaceuticals, you’ve got massive overarching companies but how do they portray, with over-the-counter and standard packaging, the message of their brand so that if you have a headache or a stomach ache you go from one to the other?
“And on top of that you’ve got the mandatories that have to be in a certain type size – how do you fit them on there too?”
Idipac’s Waterhouse argues that even for prescription-only medicines where branding is not appropriate or allowed, there is a major shortcoming in the predominantly white packs that are currently on the market. That is around identification of the product by the pharmacist at the point of sale.
“Why do you think you’ve got two pharmacists? There’s one to get the product and one to check it,” he says.
He argues that there could be an argument for colour-coding different types of products to help pharmacists find products more easily; although he admits that such a scheme would then throw up secondary questions around how to indicate the strength of a product, not to mention potential resistance from the pharmaceutical brand owners related to their own colours.
Shorter run lengths
Like in other sectors, while there is downward pressure on prices, there is also downward pressure on run-lengths, reports Essentra’s Folchini. “It varies from country to country, but in the last four or five years it seems that run lengths are shrinking and shrinking. In 2010, in Italy, the average run size for pharmaceutical cartons was around 50,000 units; now it is around 26,000,” he says.
The reason, he adds, is that pharmaceutical companies are changing their buying habits and keeping inventories as low as possible. In some markets, he says, contract packers are increasingly dominating the market but have lower run requirements. In the UK though, he explains, shorter run lengths are less of an issue.
Digital print may have a role to play should run lengths begin to fall elsewhere; and a suggestion was even made that pharmaceutical manufacturers could bring their print in-house with the installation of digital printing equipment.
Whether that happens remains to be seen. What is certain is that for now, pharmaceutical packaging is an attractive avenue – at least, for those willing to make the investment in getting under its skin.