Sterilization Vendors Expand Services

Cost-conscious manufacturers look for bundled services, other shortcuts.

John Conroy

By nature nearly recession- proof, the healthcare industry is still as cost-conscious as the next multibillion-dollar enterprise. That sensitivity is even more prevalent in the current uncertain economic climate. As a result, some sterilization contractors note that device and pharmaceutical manufacturers now are looking for bundled services and other shortcuts in order to keep packaging costs in check.

Bundling

The desire for bundled services is coming particularly from start-ups selling a variety of devices and drugs, according to some contractors. Is bundling a selling point? �Absolutely,� replies Brenda Sparks, account manager for Centurion Sterilization Services in Michigan. �It has been for a couple of years. When you combine services, it reduces cost and lead time. In our situation, customers are looking somewhat for one-stop shopping. With smaller start-up companies, we�re able to do the packaging, sterilization, and appropriate laboratory testing at one location.�

The time-is-money calculus is at work, Sparks says. Start-ups in particular need to avoid long delays from product brainstorm to the time when they can actually release product to market. �Once they contact us, it�s �I need my product now.� The last part of the process has to be expedited to make up for any earlier delays.�

Sparks says pricing will always be an issue. But, she insists, �In my opinion, it�s not so much about price; it�s the amount of time required to get a product to market.�

Niki Fidopiastis, market development manager for Sterigenics, saw a trend toward service bundling five years ago. �That�s the whole premise behind our Steripro consulting service. When I was hired five years ago, the reason they needed somebody like me is because they were getting more requests for one-stop shopping. That was the birth of the Steripro department.� Customers prefer streamlined operations and receiving a bill �from just one place,� she insists.

�The medical device industry appears to be one of the last industries to feel a major effect [from an economic downturn],� notes Susie Perlman of Titan Scan Technologies in Denver. A marketing and customer service specialist with the supplier of electron beam sterilization equipment and services, Perlman says that nevertheless, �manufacturers are trying to group the sterilization-related functions of a product�s development. Customers will call me and say, �I have new products, and I need a sterilization facility, a packager, and a lab.�

�There�s more than a little outsource bundling here in Denver,� Perlman continues. She maintains contact information for several labs and packaging companies in the Denver metropolitan area as well as throughout the country. �I started doing this a long time ago. It made sense to be able to assist my customers through the entire sterilization/validation process.� She says, �Customers are also requesting, as an additional service, that we ship direct loads to distribution centers as opposed to shipping products back to the manufacturer�s warehouse, thus requiring them to handle the product again.� 

Wallet Watching

Gordon Ely says that healthcare customers are a little reluctant to pull out their wallets at the moment. �Even though the economy seems to be pulling out of its slump, there seems to be a hesitation to spend money right now,� notes Ely, identifications and packaging section leader with Nelson Laboratories in Salt Lake City. �People are just wary. They stopped spending money because the economy was bad.� 

The resulting pricing pressures have led Nelson to keep a lid on service costs, Ely says. �We haven�t raised costs for the tests that we do, partially in response to that.�

As an example, he says that the cost of a Method 1 sterilization validation remains the same. �I�m not sure we even raised that price last year.�

Ely says Nelson has been emphasizing its hydrogen peroxide (HP) offerings�the company has a Steris MD880 series, he notes�as a timesaving alternative. HP sterilization is ideal for products that can�t be irradiated or for which EtO can result in a time-consuming wait for residuals to exit the package.
 

All clients want it yesterday, he continues. �It�s a big deal with medical device companies in particular if they have to wait for the results to come back.� Waiting for biological indicator readings or for residuals to dissipate? �That�s just money that�s tied up [when that product] can�t be shipped.�

Expedited services, such as EOExpress from Cosmed, have seen an increase in demand.

Business has picked up recently at Ethox Corp. (Buffalo, NY), Gary Benson says. �In the last four months, we�ve seen a flurry of activity, much more so than in the previous nine months,� says Benson, manager of sterilization and laboratory sales. �That�s a good indicator that the market is rebounding and that there�s some real interest in looking at outsourcing as a way to consolidate your costs, to streamline operations, and get better quality out of an operation.�

The concept is for device makers to minimize handling of the product, Benson points out. �The idea is to manufacture, sterilize, and get the product to the distributor and to the end-user as quickly as possible. The key elements are time and money. People want to reduce their costs on inventory control; they want to reduce their costs on work-in-progress (WIP) and on finished goods. The three components for savings are raw materials, WIP, and finished goods.� And be sure to place repeat transportation costs on the list as well, Benson insists.

�From the last MD&M show there certainly was a greater interest in identifying those vendors that can offer the entire package,� Benson says. �They were looking for someone who could design, manufacture, package, sterilize, warehouse, and distribute.�

Cost savings and speed to market are the main reasons Cosmed�s Clark Houghtling believes the company�s EOExpress service has had success in the marketplace. Typical turnaround time for EtO sterilization has been 7 to 14 days, says Houghtling, vice president of technical affairs. The technology behind EOExpress, which Cosmed has had for approximately five years, enables Cosmed to offer a one-day turnaround.

The successful implementation of parametric release is one of three elements of the service, Houghtling says. Cosmed�s other key advance was to develop a method �for superaccelerated aeration of residuals by aerating in the sterilization chamber and not having to go into a separate aeration room. We were able to eliminate the need to hold the product for residual dissipation after sterilization.� Batch records are sent immediately to customers by e-mail through a password-protected secure route.

As the �doubting Thomases in the industry� have come on board, business for the process has increased tenfold, Houghtling claims. �Some people were not up on the latest methods or they did not understand that parametric release was completely acceptable� by the regulatory agencies and codified in ISO and EN documents.

As far as bundling is concerned, if there is an upswing in demand for such services, Wayne Rogers hasn�t seen it. A California-based consultant for medical device companies, Rogers says, �I don�t have clients who�ve done this.� His four clients include endoscope manufacturers and the like. 

The industry veteran admits a convenience factor exists. However, he notes that a big concern for a manufacturer is that bundling basically makes the contractor �judge, jury, and everything else. If the vendor sterilizes it and then tests it and it�s sterile, it�s a double liability.� In other words, how does one protect against bias?

He acknowledges the concept can work if the company has enough control within itself. �The problem is, are they big enough to do that and have enough separate divisions within the company. If they have that, it probably will work. Some companies, though, just want to specialize in one type of service.� 

When it�s pointed out that the bundled services all fall within the same realm of sterilization, Rogers agrees that a contractor that arranges packaging, sterilization, and testing basically has control over all the sterility-related services. �It may make sense. It�s multidisciplinary, but there�s one goal at the end. I just haven�t had anybody who wanted to do that.� 

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