Novel Drugs, New Regs, and Compliance Needs Fuel Growth

Despite a shaky economy, demand rises for drug packaging materials and machinery.

Erik Swain, Senior Editor

Whether technology or regulatory issues are the topic at hand, the pharmaceutical packaging industry has been an extraordinarily active one in the past year, and should continue to be in the near future.

The need to find ways to package increasingly biosensitive drugs with increasingly complex regimens and the need to make packages both child resistant and senior friendly have both spurred much development in the field. Not only are finished packages and labels being affected, but also new materials are being tried, as are machines that allow greater flexibility. Advances in bar coding and other means of tracking packages as well as an initiative to develop electronic labeling could also have a major effect on the industry.

In turn, some of the activity is being spurred by regulatory agencies such as FDA and the Consumer Product Safety Commission (CPSC; Washington, DC). FDA's over-the-counter (OTC) and prescription-drug labeling initiatives are causing drug companies and their packagers to rethink their labels and reconfigure their packages. CPSC's mandate that clinical trial packages be child resistant and senior friendly has prompted innovation and redesigns. And FDA's recent efforts to shore up rules on post-approval packaging changes and drug master files (DMFs) have implications for how packages will be developed and packaging processes managed.

GROWTH FORECASTED

Given all that, it is not surprising that the U.S. pharmaceutical packaging market is expected to experience growth. It should jump nearly 4% per year until 2004, when it will reach $4.7 billion, according to a study by market research firm The Freedonia Group Inc. (Cleveland). The study projects blister packages to be the fastest-growing segment, jumping 5.0% per year to $1.045 billion in 2004. (See Tables I and II.) Plastic bottles are expected to climb 3.8% annually to $845 million, other kinds of primary packaging will grow 3.7% to $1.325 billion, secondary packaging should jump 2.8% per annum to $670 million, and accessories should climb 3.3% to $785 million.

    % Annual Growth
Item19891999200499/8904/99
Pharmaceutical
Packaging Demand
2501387746704.53.8
Containers:2051321038854.63.9
Blister Packaging37382010458.25.0
Plastic Bottles4597008454.33.8
Other Primary Containers789110513253.43.7
Secondary Containers4305856703.12.8
Packaging Accessories4506677854.03.3
Source: The Freedonia Group Inc. (Cleveland)


Table I. Pharmaceutical packaging demand ($ million).

 

Item19891994199920042009
Pharmaceutical Shipments ($ bil)42.767.9102.1148.6210.0
Cost of Pkg/$1000 Shpts58.646.238.031.426.4
Pharmaceutical Packaging Demand25013138387746705545
Containers:20512585321038854630
Blister Packaging37358782010451290
Plastic Bottles4595767008451010
Other Primary Containers789914110513251570
Secondary Containers430508585670760
Packaging Accessories:450553667785915
Closures277343415486565
Other173210252299350
Source: The Freedonia Group Inc. (Cleveland)

Table II. Pharmaceutical packaging demand by product group ($ million).

A report by consulting firm Frost & Sullivan (Oxford, UK, and San Antonio, TX) on resins in the healthcare packaging market identified several growth drivers for pharmaceutical packaging. These drivers include a significant increase in stock-keeping units (SKUs) of pharmaceuticals and dietary supplements; the conversion of more drugs from prescription to OTC status, which magnifies consumption of medications; an increase in the introduction of new medications; the growing acceptance of blister packaging; the abundance of contract packagers eliminating the need for pharmaceutical companies to invest in the more-complicated blister machines; and the premium commanded by the improved properties of new resin technologies.

There are both an upside and a downside to such growth, says Renard Jackson, executive vice president of sales and marketing for PCI Services Inc. (Philadelphia). "We will see an increasing number of drugs being launched into the marketplace, causing not only a challenge for pharmaceutical organizations to be able to package the number of products needed for launches, but also possibly causing capacity issues at outsource organizations. There is a lot of work to be outsourced, but not a lot of capacity in the marketplace to handle it. At the same time, we see multiple-country launches becoming more prevalent, so having the capacity to launch a product in the United States and Europe will be a huge issue for pharmaceutical organizations and outsource packagers in the future."

IMPORTANT DEVELOPMENTS

A pair of labeling regulations will have a significant impact on how drug products are labeled and packaged. In April 2002, FDA's new OTC labeling format goes into effect. To enable consumers to read and understand labels better, drug manufacturers will have to accommodate larger type and a standardized format to convey information. In some cases, this will mean changing labels, increasing the size of packages, or both.

"I have seen many new packages that comply with the regulation, and it appears that everyone is trying to make it more user friendly while meeting the standard format," says Kumar Nanavati, director of packaging development for OTC drug manufacturer Whitehall-Robins (Madison, NJ). "But if you have a smaller package, you have to be innovative in order to fit all the necessary information, and it looks like some secondary packaging designs are in fact becoming more innovative."

FDA is now trying to apply some of the same principles to the professional labeling of prescription drugs. A proposal that came out earlier this year would enlarge the minimum type size and group the most important facts a physician or caregiver should know about the drug into a special section at the top of the label.

"This [proposal] is very important," says D. Bruce Cohen, director of packaging technology—North America for GlaxoSmithKline (Research Triangle Park, NC, and Pittsburgh). "It could make the actual document 60–75% larger, with its minimum 8-point type and the new highlights section that has to be continually updated. The manufacturers are all struggling to make it work with the new size. In some cases, we will have to use more than one piece of paper. You're looking at two full pages of information, folded down into something manageable. For some items, the paper would be larger than the bottle."

Such requirements have prompted much discussion of whether entire packages would have to be redeveloped or reconfigured, he says. "From the manufacturer's side, it could be difficult to attach [the larger labeling] to the sale item. We have discussed whether it would be better to change the sale item. For example, instead of having a big bottle of 60 tablets, you could have 6 bottles of 10 tablets, put the insert inside the single carton, and handle it on an automated basis. This issue has hit all the manufacturers squarely in our production area."

It might become less of a concern if FDA allows drug manufacturers to drop paper labeling for electronic labeling for pharmacist information regarding prescription products. A proposed system is beginning to undergo tests, says Cohen, who is part of the Pharmaceutical Research and Manufacturers Association (PhRMA; Washington, DC) task force regarding this issue.

"Instead of a piece of paper, it would allow you to make available electronically the labeling at the dispensing site," he says. "Changes would get out within 24 hours of being approved. With paper, it may be three to six months before the new paper label shows up at the dispensing site. As soon as we got approval for a change, we would send it electronically to a data warehouse. It would be updated in the systems at the individual dispensing sites. There would be a bar code on the sale item. You would scan it or hand-key it in, and it would bring up the package insert immediately. It could sit on existing pharmacy software or on a standardized electronic box. Pharmacists could see what has been updated since you last logged on and acknowledge that they read the updates."

Bar coding is also a part of the industry's increased efforts to combat counterfeiting, diversion, and other unauthorized uses of drug products. The security packaging field, from invisible tracking codes to holograms for authenticating products to retail-level source tagging to prevent theft, has increased in prominence in recent years and should only continue to get bigger, industry observers say.

COMPLIANCE AND CHILD RESISTANCE

 

Demand for bottles will grow by nearly 4% by 2004. Photo courtesy of Margo, an Alcan Packaging Co. (Montreal, QC, Canada).

Thanks to increased public awareness of the prevalence and danger of drug regimen noncompliance, there is an impetus to develop packages that help both patients and caregivers adhere to prescription instructions. There is also a push for better adherence to CPSC's guidelines on making drug packages both child resistant and senior friendly, especially where clinical trial packages are concerned. At times, these two goals seem to be at odds with each other, but there are significant opportunities for packagers who can produce solutions that meet both.

"The use of compliance packaging will increase, and that will make it easier to ramp up a dosage during a drug regimen," Nanavati says. "The consumer will know what he needs to take and whether he is missing anything. It will make it easier to have multiple medications."

Compliance packaging will get a serious test with the advent of a weekly dosage form of Eli Lilly & Co.'s (Indianapolis) Prozac, says Peter Mayberry, executive director of the Healthcare Compliance Packaging Council (HCPC; Falls Church, VA). "If the weekly version seems to find a good place in the market, it could be a significant issue for packaging, because you would really want to ensure the drug is taken when it is supposed to be," he says.

Compliance packaging could also get a boost if Congress passes a Medicare reform bill that also addresses medication errors, PCI's Jackson says.

While the drive toward compliance packs could boost unit-dose packaging use, the drive toward child-resistant, senior-friendly formats could hinder it, as some manufacturers believe CPSC's protocol is more difficult for blisters to pass than it is for bottles. In fact, at a recent Center for Business Intelligence conference on pharmaceutical packaging in Philadelphia, one drug manufacturer noted that it had to switch from blisters to bottles for one product's clinical trial because it could not find a way to meet child-resistant, senior-friendly requirements using blisters.

However, it may be too early to predict an outcome. Packages to accommodate compliance, child resistance, and senior friendliness are being developed. And with management changes soon to take place at CPSC because of CPSC Chairwoman Ann Brown's recently announced resignation, initiatives to enforce child-resistant, senior-friendly regulations on clinical trial packages and physician samples could "become up for grabs," HCPC's Mayberry notes. President Bush nominated CPSC Commissioner Mary Sheila Gall to replace Brown, whom Mayberry calls Brown's "ideological opposite." Despite the Senate's rejection of Gall's nomination, Mayberry expects Bush to push for a candidate that believes that "government can't solve all our problems and that believes that parents and consumers must take responsibility at some level."

MACHINERY OUTLOOK

With new and enhanced packages on the way, industry demands packaging machinery that is versatile and flexible enough to produce them. As a result, the healthcare market is one of the few segments projected to increase its spending on packaging machinery from 2000 to 2001, according to a purchasing plans study by the Packaging Machinery Manufacturers Institute (PMMI; Arlington, VA). U.S. pharmaceutical and medical device manufacturers expect to boost spending on packaging machinery by 5–7%, the highest gain of any sector surveyed and far better than the projected growth for all sectors combined, which PMMI expects to be flat. (see Table III for a list of expected purchases).

There are a variety of reasons for the projected growth, which may end up being tempered by some firms' unwillingness to make major capital investments. A major factor, the survey states, is that drug and device companies are trying to improve productivity by replacing old machinery. Thirty-six percent of respondents in the healthcare industry identify that as the main reason for ordering packaging machinery in 2001. (See Figure 1.)

 

Figure 1. The primary reason for ordering packaging machinery in 2001 by the pharmaceutical/medical devices segment (by percent of respondents ordering in 2001).

Other factors are the accelerating rate of new drugs and devices being introduced to serve the increasingly aging U.S. population, and the influx of generic drugs that have hit the market as a result of patent expirations for numerous brand-name drugs. In some cases, especially for protein-based drugs, there is a shortage of manufacturing capacity. Nutritional supplements continue to garner strong demand. And industry is updating machinery in trying to comply with regulations on label readability and tamper-evident, child-resistant, and senior-friendly packaging.

The survey also reports an increase in the use of the Internet in researching packaging machinery. It found that 78% of respondents are using the Internet to find out about packaging machinery, and 60% plan to increase their use of it in the near future. Significantly, 28% say they use the Internet to order machinery parts, up from 18% in the previous year.

PROCEDURAL CHANGES

There are also a number of developments that will affect how drug companies and their suppliers conduct their packaging procedures.

One is the development of PACPAC, a comprehensive postapproval changes guide for packaging, which is expected this year. It aims to incorporate elements of the 1999 container-closure guidance, the 1999 postapproval changes guidance, and the 1998 stability draft guidance. Using a series of grids organized primarily by dosage form and moisture vapor transmission rate (MVTR) per unit, it would delineate what sorts of tests an applicant should use to demonstrate that a new material provides equal or better protection than the current material. Those in industry involved in the effort say it would finally provide a single, clear answer to how a change in material should be conducted and explain which of several guidances to follow, especially if there are inconsistencies between them.

FDA may also be able to create a centralized list of packaging materials that have been used with an approved drug product before. The postapproval changes guidance provides fewer regulatory hurdles for a company if a desired material has previously appeared on an approved product.

These issues will be especially important for parenterals and drug-delivery systems, which tend to hold newer, more-volatile drugs that are more sensitive to moisture, light, and oxygen, and which tend to have functional components that fall under heightened regulatory scrutiny. That segment of pharmaceutical packaging is considered to be a fast-growing one, and those firms whose products present a minimum of hassle stand to gain.

Another significant development is FDA's increased interest in the proper maintenance of DMFs, in which packaging suppliers store proprietary information related to their products for the agency to consult when they are named in a new drug application or postapproval change request. When the postapproval changes guidance came out in 1999, the agency began to rely more on the information in these files and found that many of them were not being organized, updated, and maintained properly. This, in turn, has caused drug companies' applications to be delayed while the DMF issues were sorted out. As a result, the agency and industry will hold a seminar on proper DMF maintenance, which has been tentatively scheduled for March 2002 in Washington, DC.

OUTLOOK

With so many changes occurring in the pharmaceutical industry and in the regulations that govern it, there are numerous opportunities for makers of drug packages, labels, accessories, materials, and machinery to increase sales by meeting those needs. Those suppliers who recognize just how dynamic the industry is could stand to benefit significantly.

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