Neil Farmer discusses the challenges facing pharmaceutical packaging producers
The healthcare and pharmaceutical packaging market, both primary and secondary packaging, is big. Estimates put it at $50 billion in value globally and rising. There is a forecast growth of around 6 per cent per annum, with Western Europe, USA and Japan the leading markets.
Emerging nations such as China, Brazil, India and other South- East Asian countries such as South Korea, offer fast growing pharmaceutical packaging opportunities. Stringent government standards and regulations in terms of quality, safety and security of packaging products have always been the by-word of the sector. Is believed that the UK pharmaceutical industry alone spends over £13 million per day on R&D, such is the drive for innovation and launch of new products in the sector. This is the background, now what of the challenges for packaging companies attempting to enter the pharmaceutical market.
Challenges for packaging companies entering the market
It goes without saying that these are immense. In my career I have been involved with several businesses that were attempting to secure their first order from leading global healthcare and pharmaceutical producers. The demands were considerable, not because the companies were not producing the quality of packaging required, but because of the stringent quality, procedural and regulatory requirements. However the rewards in terms of long term contractual relationships and volumes justified the hard effort and meticulous attention to detail needed to achieve success.
New EU Regulations
I mention all this because recently announced EU regulations are again putting pharmaceutical packaging in the limelight. The Falsified Medicines Directive (FMD) is due to be implemented in 2016. Although some aspects of the directive will not be known until 2014, as the name suggests it is targeting falsified medicines infiltrating the legal pharmaceutical chain in EU countries. The challenge is massive. The lobby group the International Anti-Counterfeiting Coalition estimated that the share of world trade in counterfeited and illegal goods was worth $600 billion, including counterfeits bought on-line, and the figure is rising. The bottom line is that there is a wave of counterfeit pharmaceutical goods entering the market and urgent action is needed. The so-called “patent cliff”, when patent protection on established drugs expires leading to the introduction of generic products which can be replicated and sold at lower prices than branded products, is also playing a part in this.
What packaging producers need to do to be successful
So what can packaging producers do about all this? I believe pharmaceutical packaging producers have great innovative skills. Improvements in packaging are resulting in improved plastic containers, greater barrier protection, greater security and ease of use. With the new EU Falsified Medicines Directive, improved and modified coding and marking systems will be required. The need will always be there to differentiate branded products from generics and packaging can play an important part in this as well, with higher added value products requiring attractive print and decoration. Then there is the rise in new consumer technologies and the role they can play in communication of messages, particularly in over the counter (OTC) markets. Greater labelling and information is vital in many languages as the demand for emerging markets continues to expand. Higher added value packaging will also benefit from new advances in biotechnology and nanotechnology based medicines.
There are those who say that by the nature of the product and the industry, pharmaceutical packaging lacks opportunities to innovate. Further, it is regimented and rigorously tied to regulatory and statutory guidelines and the need to conform to stringent criteria. All of which is true, to some extent. What is also true is that, from a packaging producer viewpoint, there is nothing to fear from the challenges of entering these markets. It might involve extra documentation, quality control procedures, greater attention to detail and the supply of more complex information. There might be greater regulatory assessment and scrutiny, but ultimately the hard work can yield tangible results.
The pharmaceutical market is entering a crucial phase of development and packaging companies should be poised to seize the opportunities that will be created.