Printing Alliances Bring Quality, Savings, and Variety to Drug and Device Packagers

Partnerships among label printers, inserts and outserts printers, and carton makers are giving packagers access to the latest and greatest in printed material. Independent firms are also expanding expertise to offer similar benefits.

Daphne Allen, Editor

Gregory Spalla has a long-standing relationship with Beck Carton. Senior logistics manager for Schwarz Pharma Manufacturing (Seymour, IN), Spalla has been purchasing cartons from the Milwaukee-based manufacturer for years for a number of his firm's pharmaceutical products. "We have an outstanding relationship with Beck, and we trust them because they have consistently provided quality cartons and the highest level of customer service," he explains.

So when Beck joined Pharmalabel (Greensboro, NC) and Flottman Co. (Covington, KY) to form Rxperts Printing Alliance, Spalla knew that if Beck trusted its new partners enough to lend its name to the alliance, so could he. "When a company makes an alliance with others, it's making a strong statement of its confidence in those other organizations," he says. "The three organizations are all on the same page on how they manage customers and provide service and with their attention to quality."

Since Spalla's introduction to the alliance, Schwarz has audited Flottman and Pharmalabel and has even begun some selective ordering of labeling materials and inserts and outserts. "Pharmalabel was able to look at our labeling materials and suggest some alternatives that will provide fairly significant savings of about 25–35%," Spalla says.

Alliances like Rxperts are becoming more frequent in the healthcare product labeling industry, connecting companies like Schwarz Pharma to networks rich with expertise, capability, and diversity. In Schwarz Pharma's case, Spalla was able to find new suppliers that shared the same values as his trusted supplier, and he found cost savings as an added bonus. In other cases, pharmaceutical and medical companies in search of labeling and other printed materials are consolidating time spent on design and procurement, reducing costs, and reaching a breadth of technology.

Independent companies, whether as a result of competition with such alliances or of industry demands, are also expanding their offerings, giving their customers more styles and product categories to choose from. Consequently, today's pharmaceutical or medical device firm should have little difficulty finding a one-stop shopping source for all of its printing needs.

DEMAND FOR ONE-STOP SHOPPING

Consolidation in the medical and pharmaceutical industries through mergers and acquisitions has changed both staff sizes and individual responsibilities. Pat Serpico, corporate vice president of sales and marketing for the Impaxx Labels and Packaging Network, explains further: "Mergers often result in organizational downsizing, placing more work and responsibility on a core of fewer packaging professionals. And companies are minimizing inventory levels, so these professionals are placing smaller orders more frequently. The time necessary for working with multiple suppliers for individual package components is no longer available. Pharmaceutical companies are reducing their supplier base to a select few that can provide comprehensive packaging services."

Adding to this is the push to get drugs and devices to market sooner to beat out competition. Packaging and labeling departments "are forced to get products packaged and labeled faster, and it gets harder when you are juggling four or more different packaging components," adds Robin Henfling, president of Arlington Press (Brooklyn, NY), part of the Impaxx Pharmaceutical Packaging Group.

Impaxx was formed five years ago to help these packaging professionals meet deadlines and to make their jobs easier. The network has brought together the resources of 11 different, wholly owned high-quality packaging companies that complement one another, Henfling says. "We sell the complete printed package through a single contact. Consolidating firms don't have time to deal with several suppliers."

To ensure that it was on the right track, last year Impaxx conducted a blind independent survey of customers and potential customers. Respondents were asked whether they would agree to purchase products from a single source, and if so, why. "Ninety-one percent said yes," says Serpico. "Their reasons were the potential for better service through simplified communications, greater recognition from their suppliers, ability to leverage pricing, access to a breadth of technology, potential to reduce the number of ordering transactions, and faster turnaround on projects."

Vendor reduction by the pharmaceutical industry has been an issue for many years, and companies that only offer one product are more likely to be eliminated, explains Lance M. Vandenbrook, sales and marketing manager of New Jersey Packaging (Fairfield, NJ), which was purchased by Menasha Corp. in 1993. "I think the industry has changed and therefore forced organizations that had single product offerings to find a partner to go to market with. If you can bring multiple product offerings to the table, or the total packaging solution, you are more likely to gain business."

Vandenbrook argues that independent companies like New Jersey Packaging are positioned well to compete against the variety of alliances in the marketplace. "We currently have the capability to supply the pharmaceutical industry with labels, inserts, outserts, cartons, booklet labels, coupon construction labels, lidding materials, and a variety of other products. However, while we do not have any plans to form an alliance, we would not be opposed to one with another company if it makes sense for our customers."

Lowell Matthews, president of Ampersand Label Inc. (Garden Grove, CA), which makes the MultiVision extended-text label, agrees that alliances may have a "convenience factor" for clients because of the appeal of a "one-stop shop." However, Ampersand "has virtually never lost business because of our structure as a stand-alone label source," he says. "Instead, because of the technical nature and stringent requirements of drug-label manufacturing, our well-defined and focused approach has been well received in the field. An independent is less likely to compromise product designs or services in order to force-fit several packaging components available within an alliance."

Pharmagraphics LLC (Itasca, IL) tried an alliance, but decided to discontinue it. "We had an alliance for 18 months, but it didn't excite our customers much at all," explains Ernest Chaplin, vice president of sales and marketing. "What we did see was the need to be integrated fully in our product line; therefore, we did search for an acquisition in order to fulfill the need to offer the major product lines to the market. Our initial experience so far is that our customers and prospects want one company to supply them labels, inserts, cartons, and specialty labeling items. We have had a rash of new opportunities in which new customers have told us that the ability to supply more than one component, and in some cases all three, was one of the reasons we were selected."

TIME CONSOLIDATION

Suppliers say that when cartons and labels are produced by the same team, color consistency can be maintained. Photo courtesy of Rxperts.

Using a printing alliance or a company with multiple products has distinct benefits. Professionals can limit their interactions to just a few, if not just one representative, reducing the amount of time spent on the phone and traveling to production sites and trade shows. "Building a relationship with one technical sales representative facilitates open communication," adds Henfling. At Impaxx, customers are assigned a single representative who will source and organize other contacts within the network. For pharmaceutical printing projects, that representative is based at Arlington Press's Pharmaceutical Packaging Group. "The representatives have a general knowledge of all the product offerings within Impaxx, and he or she will defer to experts at each plant if needed," says Henfling.

For large accounts, Henfling says that Impaxx will place an on-site representative. "The on-site contact can access through the Internet real-time inventory and ordering information and be on hand to answer any technical questions," adds Henfling. "It shows our customers that they are important enough for such service." To date, Impaxx has placed on-site representatives at Pfizer and GlaxoSmithKline facilities.

In the case of Rxperts, rather than just one contact, the alliance represents each company with a top-level professional focused on one discipline. "You have three experts, working in concert, to serve the needs of the customer," explains Des Laffan, general manager of Pharmalabel. "We clearly demonstrate this advantage when the alliance visits a pharmaceutical company. The synergy of ideas that comes from a review of a company's printed packaging components is dramatic. It is difficult to duplicate this breadth of knowledge with a single sales rep from a one-stop shop."

Adds Randy Lindert of Beck Carton: "The Rxperts approach assures the customer the final result will be that all components will work in harmony with each other. It shortens the time cycle for new or revised packaging components, and it gives the customer the time to work on other projects. We basically have taken the responsibility of development out of their hands. This is truly a time and a cost savings to the customer."

Tom Flottman, president of Flottman Co., assures companies that a team approach is beneficial. "We streamline the process and provide additional expertise. Typically, the same team controls all of the packaging components regardless of their supplier makeup."

However, pharmaceutical and medical companies may be able to find similar support from just one company. "Contrasted to an alliance, our sales and marketing organization represents the complete set of product, service, and manufacturing capabilities offered by The Nosco Printing Group," explains Thomas Henderson, vice president of marketing and corporate development at Nosco. "With all functions operating under one management with a clear mission, we feel we can respond crisply to customers with a single line of communication."

Ampersand's Matthews argues that "an independent label supplier can concentrate all levels of sales, design, and production toward one singular task: meeting the client's label needs. Independent organizations can potentially react quicker and with a singular agenda to client needs, as compared to a more bureaucratic alliance structure."

Another benefit to using a printing network or a multiple-product company is that companies can have one technical contact or team oversee the entire design and production of all printed components, which can help ensure consistency. "Cartons and labels share similar graphics," says Flottman. "It is preferable to single-source those two packaging components to have better control over the look of the combined package."

Henfling agrees. One question he feels nags at drug packagers is, "What will the final size of the insert be and will it fit in my carton? We can develop a whole solution." Adds Serpico, "You can have better color consistency if one entity handles all the artwork."

REDUCED COSTS

The way to save money is to buy in bulk, and this is easy to do with a network or company that offers a number of items. "Companies can save money by placing carton, label, and insert business with Rxperts," says Flottman. "Higher volumes translate into lower unit costs."

Long-term contracts can also bring costs down. "The other way Rxperts can save companies money is by securing long-term commitments, running anywhere from three to five years," explains Lindert. "Such contracts benefit customers by giving them a reduced guaranteed price for the term of the contract. They also benefit the alliance and customers by allowing us to work through any issues there may be at the very beginning without having to worry about losing the business. It gives us the opportunity to gain efficiencies and to achieve the margins we need to continue to grow. The result is a continuation of the high level of support our customers have come to expect."

However, Lowell advises engineers not to make cost the primary consideration. "Although costs and associated profits are on the minds of every client, the importance of well-designed, quality labels overshadows the need to save several pennies per label. This is particularly the case currently, as government regulations are forcing new, creative, but often more-expensive labeling solutions to be adopted. Forward-thinking companies are realizing that the added benefits of these new label designs can far outweigh the often-minimal added costs. For example, the more expensive multilayered, extended-text labels enable clients to include text and graphics for government-mandated information and dual-language instructions as well as promotional information."

BREADTH OF TECHNOLOGY

Label Express's Reveal Estate, which increases label space and offers tamper evidence, is available through Impaxx.

The main motivation behind such printing alliances is to bring various companies with specific capabilities and expertise together to offer customers one supplier source. "With capabilities in labels, inserts and outserts, and cartons, Arlington's pharmaceutical business unit is self sustaining," Henfling explains. "But we can offer unique products and capabilities from Impaxx's other business units, such as the expanded-labeling solution Reveal Estate from another Impaxx company, Label Express (Midvale, UT), which increases printable label space by 66%."

Companies within a partnership may also be able to shift production to the most capable of partners, providing customers with a broader range of capabilities. Says Serpico: "Other cGMP-compliant Impaxx companies, as well as Arlington, can produce pharmaceutical cartons, so we can move production to the most appropriate business unit, which could be Innovative Folding Carton Co. (South Plainfield, NJ). We can provide seamless use of multiple facilities while maintaining strict cGMP compliance."

Some independent companies also offer a variety of products and capabilities. "New Jersey Packaging has continued to make capital investments at its Fairfield, NJ, site to increase capabilities for inserts and outserts. Our folding-carton business already existed within Menasha Corp. However, we did not market that product offering until 1998. The same goes for Booklet/Plus labels and many of the multiple-layer coupon constructions we produced. We had those product offerings through our corporation; we just did not start marketing them until the last five years," explains Vandenbrook.

Henderson adds that The Nosco Printing Group is positioned as a complete solutions provider for printed pharmaceutical packaging, including labels, inserts and outserts, extended-content labels, folding cartons, and other combination products. "Those solutions extend to services as well, from supplier-managed inventories to digital prepress and specifications management, not to mention product design and development," he explains. "Folding cartons are produced in Waukegan, IL. Labels are produced in two plants, Gurnee, IL, and Carrollton, TX. Inserts are manufactured in Gurnee, but insert and label production are managed separately, with a clear focus on operational excellence for that product line."

Henderson adds that there is a benefit to a "breadth and depth" of offerings. "Not too long ago, for example, a customer had to relaunch a product due to both some technical and regulatory issues. We turned around cartons, labels, and inserts in 24 hours. FDA changed its mind about some copy, and two days later, we did it again. There's no way three suppliers could have done it as fast for the customer."

Such fast turnaround is often the strength of an independent firm with a small but dedicated team. For instance, Edwards Label (Los Angeles), the specialty label printer behind the design of the Peel N Seal booklet/label hybrid, has been able to turn orders around in 24 hours, too. The firm does all of its design, printing, testing, and labeling in-house. The firm is also able to structure its business around the needs of its clients: Andrew B. Vale, president of the firm's new East Coast operations in New Jersey, relocated himself and his family to open the facility. "The decision to move was the result of specific requests from clients on the Eastern Seaboard. Our manufacturing plants in Mexico and Brazil, operational this year, are also in answer to requests from our larger corporate customers," Vale says. Also, in August of this year, the firm will relocate its Los Angeles operations to Ventura, CA, in a 45,000-sq-ft facility equipped with cleanroom facilities.

COMMON PHILOSOPHY

Spalla tried Beck's alliance partners simply because he knew and trusted Beck, and other pharmaceutical or medical companies may be inclined to do the same from similar introductions. "Without doing a lot of due diligence, we knew we could trust Pharmalabel and Flottman, knowing Beck's reputation. Beck wouldn't have trusted its name otherwise." As with other industries, recommendations go a long way.

But more than quality is needed. Concludes Flottman: "The industry will demand more than solid cGMPs and reliable products delivered on time. The industry will benefit from the synergy of ideas and breadth of expertise offered by an alliance of pharmaceutical packaging printers."

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