CONTRACT PACKAGING: Forecasting Labor
McKesson RxPak (Memphis, TN) has focused on the cost-effective production of compliance blister formats, with business growing from generic firms that require lower packaging expenses. Semi-automated assembly that employs trained, yet temporary, personnel is used to keep lines flexible for different projects, says Kevin Carter, sales executive, RxPak.
“Once you fully automate a line, you lose it for standard blister production. You have to consider in planning how much standard blister capacity you are tying up,” he says.
“We are planning our equipment needs one or two years out, starting with excess capacity in mind, so that we have available capacity to pick up business surges and new contracts. Customers won’t wait for the 10-to-14 month lead time for installing a new line,” says Carter.
“Generics present the most opportunity for us, because many don’t have the volume to justify a machine investment that can easily run to $2 million. We have the high aggregate volume in these drugs to cover the equipment costs,” he says.
Carter says that brand companies have different time lines and cost structures as compared with generics. A brand firm is looking to market their product, so package development might start a year before drug approval. Generic companies are seeking the most economical way to put a compliance package into the market. “One of the largest retail pharmacies, for instance, has established price points as to what the cost should be,” Carter says.
Labor costs are a factor in semiautomated assembly. “Capacity is not just equipment; it is also personnel staffing,” Carter notes. “When a major product launch is anticipated, the company focuses on completing current projects ahead of schedule in order to free up teams for other production lines. RxPak uses temporary service personnel for manual assembly projects and product launches, to ensure product can be shipped within 24 hours of the customer’s order. We are developing a pool of GMP-trained employees and part-time personnel,” he says.
As customer demand for compliance blister packaging has increased at RxPak, the packager has focused on developing blister cavity designs that can be used for multiple SKUs, to drive out wallet-style package production costs.
“The main push we have seen for compliance designs is on the generics side, because retailers are saying they will source the generic (exclusively) from the company that first provides compliance packaging. These often are F=1 rated packages, because generic companies may not have the toxicity data on the drug readily available. Without that data, they have no choice but to default to an F=1 package,” he says.
McKesson has packaged generics in Meadwestvaco’s DosePak, in the Key.In compliance pack format from Nosco, and is assessing Meadwestvaco’s Shellpack. Also, the company is packaging a generic in a bend-and-peel compliance format from Shorewood Packaging.